Hyundai Confident New Flagship Will Click with Less-Snooty Customers
August 21, 2008
By Bill Visnic
ANN ARBOR, Michigan - Its current top-of-the-line sedan isn't exactly lighting up the scoreboard, but that's not stopping Hyundai Motor America Inc. from forecasting a vastly better fate for its audacious new flagship, the Genesis.
Although Hyundai predicts this year will see it move just 8,000 examples of the Genesis - which flaunts an all-new and briskly fluid rear-wheel-drive platform and an equally expressive clean-sheet 4.6-liter V8 - the company thinks it can move some 50,000 Genesis next year, said John Krafcik, vice president for product development.
That'll be a stretch if Hyundai's experience with its range-topping Azera is any indicator. According to data from Edmunds.com, through July, Hyundai sold 12,251 Azeras and just slightly more than 800 last month. In effect, the company expects the new Genesis flagship to double the performance of the Azera.
"Fifty thousand is a pretty bold number for Genesis considering Hyundai ended 2007 with only three vehicles registering more than 50,000 sales for the year - Sonata, Santa Fe and Elantra," said Jessica Caldwell, Edmunds.com's director of pricing and industry analysis.
She further notes those models are significantly lower in price, with transaction prices averaging around $21,000, according to Edmunds.com's True Market Value information. She also notes the Genesis has some new competition in terms of price since it was introduced - the 2008 Cadillac CTS now starts at $29,370 under the just-announced GM Employee Pricing promotion that runs through early September.
Still, apart from its healthy list of luxo equipment that's often optional for the Mercedes, Lexus, Cadillac - and even Pontiac and Chrysler - competitors the Genesis faces, the car's obvious
calling card is one Hyundai has long established: a devastatingly affordable price.
The base Genesis with the company's already widely-employed 3.8-liter V6 (290 hp) starts at $32,250; the Genesis 4.6, fronting the seamless and silent new "Tau" 4.6-liter V8 (375 hp!) begins at a startling $37,250 - a price that, at best, nets an entry-level sedan and V6 power from the established German and Japanese competition.
But it seems probable hitting that 50,000 sales mark will be dependent on the lower price point of the coupe (coming in the first quarter of 2009), which will offer a turbocharged 4-cylinder as its base engine and the V-6 as the upgrade engine.
"I think 50,000 is reasonably achievable," said Krafcik at a Genesis media drive here. He said Hyundai is forecasting sales of 20,000 Genesis sedans and 30,000 coupes. Of the sedan total, the Genesis 4.6 packing the Tau V8 is expected to account for 20 percent of the sales mix. The V8 Genesis will not be in showrooms for a few more weeks.
The bold Genesis sales forecast comes in the face of a seriously struggling industry and record-high gasoline prices. Company officials remain unfazed: Krafcik says Hyundai is gaining prominence among consumers who are increasingly less-skeptical of the brand - and its residual values are among the industry leaders.
Krafcik says all this, combined with the swirl of rapidly-evolving economic influences in the U.S., has created an "inflection point" of opportunity for Hyundai to launch a BMW- and Lexus-baiting flagship - "the democratization of luxury," as he calls it.
"Yes, I know - it's probably not the best time to launch a V8," said Krafcik. The good news, he says, "is how darn efficient it is."
Supporting the point, Environmental Protection Agency fuel-economy ratings for the Genesis 4.6 are 17 mpg city/25 mpg highway - only slightly behind the 18 mpg city/27 mpg highway generated by the V6-powered Genesis.
Meanwhile, Krafcik confirms Hyundai is bucking the overall U.S. market, tracking to end the year with its highest-ever total market share, which currently is about 3.2 percent. Hyundai now is the market's No. 7 brand in terms of overall sales.
Photos by Hyundai
1 - Hyundai admits exterior styling is "fairly conservative," but also deliberately cut back on exterior badging, most notably for the grille.
2 - Interior materials and craftwork are exceptional considering Genesis' price point, and the leather dash of the optional Premium package is unique.
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