Hyundai Genesis

Hyundai’s introduction of its premium Genesis sedan and coupe isn’t likely to provide the traction the Korean automaker wants with the Hyundai brand. Certainly, the Genesis will probably sell fairly well given that the model measures up quite well with premium cars from Mercedes, Cadillac, Infiniti, Lexus, BMW, and Audi. But, there is one problem that remains: the car is still a Hyundai.

In the North American market (US and Canada) much importance is placed on the development of a brand and its perceived value. It took many years for Hyundai to convince people that Hyundai was more than a cheap alternative to Toyota, Nissan, and Honda.

Hyundai Genesis

Even years after the company’s quality levels improved significantly to the point where Hyundai and Toyota are mentioned in the same breath, consumer perception is still lagging.  There is no better proof of this than the ongoing $3000 rebate the automaker has had on its capable mid-size Sonata sedan.

Hyundai announced last month that they are creating a luxury brand (not yet named) which will debut first in China. The automaker plans on developing the brand to compete directly against BMW, Mercedes, et al, while elevating the Hyundai brand a notch as well (at least in China). If the new brand succeeds in Asia, its introduction to the North American marketplace is all but assured.

Hyundai Genesis

Creating a new brand isn’t as simple as slapping a fresh name on an upscale model. Hundreds of millions of dollars has to be expended for developing a dealer network (or allowing the current Hyundai network to sell the premium models), advertising, etc. Toyota’s Lexus brand caught on quickly, but Nissan’s Infiniti brand almost did not make it, while Honda’s Acura brand has been a success for them.

Quite frankly, Hyundai will be competing against more luxury makes than what the Japanese automakers countered when their new brands were launched in the late 1980s and early 1990s. Plus, until Hyundai changes consumer perception, any luxury brand from Korea will have a tough going.

With the Genesis sedan and coupe, Hyundai has a terrific opportunity to redefine itself through one model, but convincing consumers could be the company’s biggest challenge.

Photos copyright Hyundai Motor North America.