BMW and Mercedes-Benz owners are about to have a new luxury car choice. But they may flinch at the name: Hyundai.
Hoping to find a market for thrifty rich people, Hyundai officially unveiled its $36,000 Genesis V-8-powered sedan Tuesday in South Korea, due to arrive in U.S. showrooms this summer.
Hyundai hopes Genesis will lure the well-heeled with curb appeal even if it lacks snob appeal.
"It won't appeal to the buyer who only wants the three-pointed star or the kidney-shaped grille, but people who want ... value and comfort," says spokesman Chris Hosford.
But analysts question whether the affluent would be caught dead pulling up to the valet stand at the country club in their new Hyundai.
"The luxury buyer places a relatively high importance on image," says Tom Libby of J.D. Power's Power Information Network. "People don't buy a BMW just because of the acceleration."
Hyundai placed 12th in Power's 2007 Initial Quality Study of problems in the first 90 days of ownership, just above average. It ranked behind such brands as Lexus and Mercedes but ahead of BMW and Cadillac.
Genesis will be no average Hyundai. A little bigger than midsize, the company bills it as "comparable to $60,000 premium sedans." It will have Hyundai's first rear-wheel-drive, 368-horsepower V-8. Gizmos will include the same sound system found in a Rolls-Royce Phantom.
The base-level Genesis with a V-6 starts at $30,000. The next-cheapest Hyundai car is the Azera Limited at $28,550.
Genesis won't exactly shout that it's a Hyundai. The brand's "flying H" logo appears on the trunk, but so far nowhere on the hood. That's under discussion, Hosford says.
The company considered creating its own luxury division, like Toyota's (TM) Lexus, Nissan's Infiniti or Honda's (HMC) Acura, but rejected the idea for now, he said.
Only one other mainstream automaker has tried out a superpremium model in recent years, Volkswagen's Phaeton sedan, which cost up to $100,000. Sales were lousy, and the car was dropped.
Phaeton was too expensive and heavy, says George Peterson of consultants AutoPacific. On features and performance, Genesis is likely to compete well against its luxury competition. "The challenge is going to be brand image," he says.
Luxury is a growth area in U.S. auto sales and generates healthy profits, says Stephen D'Arcy of PricewaterhouseCoopers' automotive practice.
And Hyundai and sister brand Kia have "been able to offer more value for the price," he says.