Hyundai Motor Group has decided to spin off its Genesis passenger car unit as an independent car maker to compete in the global brand-name car market currently dominated by Lexus, Audi, BMW and Mercedes.
Vice Chairman Chung Ui-sun announced the group’s plan to upgrade its Genesis brand passenger car as a premium car model with its own independent production company on Nov. 4 at a media briefing held at Seoul Dongdaemun Design Plaza. The plan is similar to what Toyota has been doing for its Lexus brand-name car model.
“We will focus on the most appropriate technologies rather than high-tech for the production of its cars,” the vice chairman said at the media session.
Hyundai Motor has been the name used for its cars for the 48 years of its operation, but from now the Genesis will be a brand-name car. It’s a fresh start for Genesis. The vice chairman said they will carry out he plan slowly to make sure everything is in place for the new venture.
Brand-name cars to be produced by the Genesis unit of the motor group will be classified into three grades, including EQ900, a super-sized luxury car model, G80 for large luxury car model and G70 for medium-sized luxury car model. By 2020, six new luxury car models will be turned out, including a sports utility vehicle (SUV) and a high-class sports coupe. The Equus model will be phased out.
Hyundai Motor has been developing its lineup of luxury car models since 2004 under a special task force. It developed the first Genesis model in 2008, but the project was suspended during the financial crisis. The carmaker put the second Genesis model on the market in 2013, and announced the decision to spin off the Genesis production after two years of preparation. From now on, the technology that went into producing the Genesis will also be applied to the production of other Hyundai car models so that their images would be boosted like Toyota did with its Lexus. The success of the Lexus as a premium car model trickled down to the auto maker’s other lesser-known cars and improved their images, leading to an increase in sales worldwide.
In the meantime, Hyundai Motor has been doing remarkably well in the U.S. with its sales surpassing 10 million units this year in the past three decades since the Korean automaker first expanded in the largest auto market in the world in 1986. Since then, China has taken over from the U.S. as the largest auto market in the world.
The huge momentum for Hyundai Motor car sales in the U.S. came in 2008 when it introduced the assurance program under which the buyers of its cars can return their cars to sales agents if they lose their jobs within a year since the purchase date at no cost to the buyer.
Many rival auto makers thought the program would backfire on Hyundai Motor, but it worked.
In 2009, overall car sales in the U.S. market skidded 21.4 percent year-on-year, the lowest in over 30 years, but Hyundai Motor’s enjoyed a sales jump of 8.8 percent, with the number of those who returned cars to the auto maker totaling very few. It was a sign that the reputation of Hyundai Motor in the U.S. jumped due to the special program.
It was the very example of Chairman Chung Mong-koo’s innovative concept for head-on competition in a time of market turmoil.
January to September came to 578,190 units, up 3.37 percent year-on-year. The Sonata is the model that sold the most among 15 kinds of cars that the Korean automaker put on the U.S. car market in the past 29 years with the Elantra (the Avante in Korea) coming in second and third taken up by the Excel (the Accent in Korea). The Elantra sales came to 2,484,788 units from 1991 to at the end of October while the Excel’s sales number of came to 2.50,000 units during the same period.
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A view of EQ900 a brand new Genesis model unveiled recently by Hyundai Motor after announcing the decision for independent production of the Genesis to compete in the luxury premium car market with premium cars like the Lexus, Audi and BMW.
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