TOKYO: How's this for a marketing challenge? Selling a South Korean luxury sedan in Europe - the home turf of Audi, BMW, Mercedes and other gilded marques.
European consumers already have plenty of locally produced choices, and those are in a funk. Sales of new cars in the region fell last year to the lowest level since 1995. What is more, politicians in France have begun taking cues from their Japan-bashing US counterparts of the 1980s, blaming South Korean imports for the troubles of European carmakers like PSA Peugeot Citroen and Renault.
That has not discouraged the leading South Korean automaker, Hyundai Motor. In the latest sign of the breadth of its ambitions, the company recently announced plans to sell a new version of its Genesis premium sedan in Europe for the first time, beginning this spring or summer.
Hyundai has been selling a version of the Genesis since 2008 in the US, where it also offers a larger, more expensive sedan called the Equus. The new version of the Genesis, with swept back headlights and a sleeker shape, is expected to go on sale in the US in April. Hyundai has yet to announce pricing for the new model, but the current Genesis starts at $35,200 in the United States.
Europe's favourites
Selling Asian-made luxury sedans in the US is one thing. Americans long ago embraced upmarket Japanese brands like Acura, Infiniti and Lexus, and all of those also compete with Cadillac, Lincoln and other Detroit brands, alongside German imports.
European luxury car buyers remain far more attached to German sedans like the Audi A6, the BMW 5 Series and the Mercedes E-Class. The three carmakers are the pride of the German export machine, and they dominate the high-end car business across Europe.
"For European consumers to move out of the small circle is extremely rare," said Antonio Ferreira, founder and director of Carnorama, a research firm in London. "Most people would rather trade down to a less expensive BMW, Audi or Mercedes."
In a sign of how tough the European market is, even Toyota's Lexus, perhaps the most widely available luxury import, had a mere 0.2% of car sales in the EU last year. By contrast, Lexus has rivalled or surpassed the German luxury brands in US market share for more than a decade.
The new Genesis has been popular in South Korea, where it was introduced in November. Lee said the company had received 15,000 orders in the first month, half of its domestic goal for the first year.
Genesis
Hong said she expected Hyundai to sell 62,000 Genesis cars worldwide in the first year, about half of them in South Korea. But she estimated that in Europe, the number might be no more than a few hundred. "This isn't going to contribute a lot of earnings," she said. "It is more about image. Europe represents the global consumer preference, so that can have a very positive impact on the brand."
Lee declined to provide sales estimates for Europe, but he agreed that the numbers would be modest. The company plans to use the Genesis as a way to showcase its innovations in technology and design, he said. The hope is that the benefits will extend to its less expensive models, in the way that tire-kickers ogling a $115,000 Audi R8 sometimes settle for a $30,000 A3.
Accordingly, Hyundai plans a more visible marketing push in Europe than the expected modest sales figures might justify.
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