Why the people at Hyundai are idiots

In February of this year, Hyundai motor company unveiled the Equus, a $60,000 full-size luxury sedan designed as a competitor to such flagship models as BMW's 7-series, Mercedes-Benz's S-Class, Audi's A8, and the Lexus LS. The Equus became available in South Korea on March 11, but it remained unclear whether or not the car would ever be marketed in America. Recent speculation suggests that it will—reports have been circulating that the 2011 Equus model will hit the US in July of next year.

Obviously, Hyundai wants to enter the luxury market. And honestly, that's all fine and dandy with me--they'd hardly be the first Asian automaker to do so. In fact, the big Japanese companies have done this extremely well. Toyota, Nissan, and, to a lesser extent, Honda, all managed to sneak into the luxury club by promising premium vehicles equal in quality and lower in price than their German counterparts. They've delivered on that promise, consistently giving its consumers a meticulously engineered product that's technically on par with--and often more reliable than the likes of Mercedes, Audi, and BMW.

Hyundai has largely stuck to the formula. Last year, it made its first foray into the luxury sector when it introduced Genesis, so named because it's supposedly the first of many Hyundai luxury cars. It's priced at a manageable base of $33k for the V6 model and $38k for the V8--about $10,000 less than comparable cars. They've held up on the quality front too. The car's features and performance testify that Hyundai is more than capable of producing a top-of-the-line ride. The Genesis has received critical acclaim and was named Consumer Report's top luxury car, Cars.com's new car of the year, and crowned 2009 North American Car of the Year.

To this I say: Good for you, Hyundai. So you can build a sweet ride. Great. I still think your company's luxury move monumentally idiotic. Why? It's not because I doubt the quality of their product. Quite the opposite-- I think that I'd recommend a Genesis over a Mercedes E class, any day. It's because in trying for luxury success, Hyundai has forgotten who they are.

What comes to mind when you think about Hyundai? Despite evidence to the contrary, I still think 'crappy economy cars for people on a budget'. There are countless examples of such stigmas attached to particular automakers, and what's more, these stigmas are hard to shake. Think about Buick. Most people immediately think 'old peoples' car', right? Well, in an effort to change that, Buick hired Tiger Woods as the brand's young and freshfaced spokesperson:

After a nine year endorsement, and millions upon millions of advertising dollars, we're all still thinking that there's no way that Tiger Woods ever drove a Buick-- that car is for old people. 

The Japanese companies understood this quite well when they entered the market, and realized that people driving BMW and Mercedes autos were not going to want to drive a Toyota, Nissan, or Honda, no matter the vehicle's caliber. So what did they do? They launched new brands--Toyota has Lexus, Nissan has Infiniti, and Honda has Acura. Hyundai has.... Hyundai?

Sure enough, Genesis sales in America have been modest--not bad, but modest. Hyundai moved 6,167 in the first five months of sale, and since then has sold about 2,000 more. So what does Hyundai do? Why, it puts out another, bigger luxury car, of course. Never mind that in the present economy, most other automakers are clamoring to downsize their product lineup. Aston-Martin, for example, recently proposed Cygnet, a $33k SMARTcar sized concept which is likely to enter production. Genesis is already equivalent in size to a Lexus LS. Now consider that Equus will be even larger- sized at what can only be described as positively monstrous. Hyundai, just as easily, could have spent money on developing a new brand, or focused their attentions on the sales of the smaller, sportier Genesis Coupe.

Between 2004-2006 in America, Volkswagen marketed the Phaeton, a full size sedan which, like Equus, was designed to compete with the 7 Series, S-Class, A8 and the like. The Phaeton was critically acclaimed, beautifully engineered, quality-controlled, and a complete failure. Why? Because people looking to spend $75,000 on a car didn't want to drive a Volkswagen. Mazda's Amati brand didn't even make it into production. Even Infiniti, a well-established luxury brand, discontinued production of it's flagship sedan, the Q45, because it couldn't hack it in the American market.

That said, Hyundai needs to wake up and realize that, sad as it is, America is not a society in which quality or even reputation can trump brand image. If the behemoth hits the showrooms next July and they still think that luxury consumers are going to spend $60,000 on a Hyundai, they've got another thing coming.