At first glance it's hard to discern who made this new luxury car. The long sloping hood evokes a Mercedes-Benz S class. The bisected grill bears a touch of the BMW 7 series. The galloping horse hood badge hints of the "winged B" on a Bentley.
With a dark burled wood dash and steering wheel, soft leather upholstery and brushed metal accents, the spacious interior oozes opulence. The driver's seat has a built-in massage system. The back seat offers a refrigerated compartment to keep drinks cool. A powerful 4.6-liter, V-8 engine with 385 horsepower sits under the hood. No less than nine airbags keep passengers safe.
0nly the "Flying H" corporate logo on the trunk lid gives any clue to the car's origin. Is America ready for a $60,000 luxury car from South Korea?
That the question would even be asked represents a remarkable turnaround for an automaker that once produced some of the worst cars sold in America. Underpowered and unreliable, the early Hyundais first introduced in the U.S. in the late-1980s were inexpensive and sold briskly until people learned just how bad the autos were. Similar dependability issues chased import brands such as Renault and Fiat from the U.S. market, but not South Korea's Hyundai Motor Co.
Tenacity combined with the introduction of new vehicle designs have spurred sales, improved reliability and sparked consumer interest. Hyundais are now thought of as well-built, utilitarian autos with a touch of stylish pizazz. This has set the stage for the launch of the Equus, a luxury car designed to compete with the likes of the top Mercedes and Lexus sedans. It goes on sale in November.
The success of Lexus, Acura and Infiniti — divisions of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co, respectively — "shows that Americans aren't as brand loyal as traditional luxury automakers assumed," said Eric Noble, president of CarLab, an automotive product and design consulting firm in Orange.
"The reality is that the same people — namely baby boomers — who made Lexus a success are the same people who will make any competent luxury carmaker a success in the United States," Noble said.
Despite its improved image, Hyundai still faces hurdles moving into the refined luxury market.
Recently, Hyundai has made progress moving upscale with its line of Genesis sedans and coupes, which sell in the high-$20,000 to mid-$30,000 range, depending on trim levels. Yet even at that price point some owners attempt to hide who built the vehicle by replacing the Hyundai logo on the trunk lid with a winged Genesis badge that dealers sell from their parts department.
Len Wahlert, a retired aerospace executive, BMW driver and former Lexus owner, said the swap is pretty common among the retirement crowd in La Quinta. And that's one reason he thinks the automaker would have trouble selling cars at roughly twice the price.
"People who shop for cars at $50,000 or more won't buy a Korean car now," Wahlert said. "I think they will find that shifting up has a ceiling."
Hyundai wants to corral shoppers such as Brian and Shelley Kadison of Beverly Hills. The Kadisons are about to replace a Mercedes CLS550 that comes off lease early next year. They're looking to lease vehicles that retail in the $75,000 to $85,000 range, such as the Porsche Panamera sedan, another Mercedes and perhaps a Jaguar.
Although he knows about Equus, it's not on his list, said Brian Kadison, a business consultant.
"My impression of Hyundai is that they make a decent car and that quality has improved dramatically over the last five or six years. I would look at an Equus as a curiosity but wouldn't consider it until it had a track record," he said.
Hyundai isn't helping itself by not spending to establish a separate dealer network for Equus, something that could turn out to be a "fatal flaw," auto consultant Noble said. Hyundai will sell the line at about 250 of its roughly 800 dealers. The car will be sequestered in a separate section or wing of each showroom, often with the Genesis cars, but even the densest of shoppers will know they are at a Hyundai dealership. Lexus and the other luxury spinoffs of Asian automakers set up separate dealership networks and offer employees special sales and service training designed to appeal to wealthy customers.
"True luxury buyers expect more than product. They expect a luxury sales and service experience, and there is no real way to do that through Hyundai dealers," Noble said. "If you look at Lexus, everything that Hyundai needs to do is all there. It is an irony because it has been argued for a long time that Hyundai always copies Toyota, but here is a case where it doesn't."
Hyundai knows that's a risk and has come up with an innovative solution, said John Krafcik, chief executive of Hyundai Motor America.
