Motor unveils two sedans in South Korea to take on BMW,
Send a link to a friend
[May 29, 2014] By
BUSAN South Korea (Reuters)
- Hyundai Motor Co unveiled two new sedans built for its
home South Korean market on Thursday, an unusual step
designed to fend off surging imports from the likes of
BMW and Audi.
The move on the eve of the Busan Motor Show reveals Hyundai's
jitters about imports from Europe and the United States, which have
soared in popularity since free trade deals cut tariffs on
foreign-made vehicles in recent years.
Foreign carmakers expect to more than double their South Korean
market share to 20 percent by 2016, compared with 2012 when tariffs
on U.S.-made imports started to unwind. Import duties on
European-made vehicles began to fall from 2011.
Hyundai - the world's fifth-biggest automaker when combined with
affiliate Kia Motors Corp - is determined to defend its dominant
share of its home market as the stronger won puts pressure on
earnings in overseas markets like the United States.
Hyundai's new large car, the AG, and a diesel version of the
Grandeur (Azera) sedan were unveiled ahead of the Busan Motor Show
which kicks off on Friday.
The AG, slotted between the Grandeur and Genesis large sedans, will
be priced from about 45 million won ($44,100) and will go on sale
late this year, Hyundai said.
"There is a big price gap between Grandeur and Genesis, which have
spurred many customers to shift to imported cars. We want to narrow
the gap with the AG," Kim Sang-dae, a Hyundai domestic sales
executive, told reporters.
The Grandeur Diesel, which features a modified version of the
2.2-litre engine used in the Santa Fe, Hyundai's mid-sized sport
utility vehicle, will hit domestic showrooms next month.
It is Hyundai's first large diesel car built for the domestic
market, and is aimed directly at a segment where imported cars are
making strong gains.
[to top of second column]
Diesel cars accounted for 62 percent of total imported cars sold in
South Korea last year, up from 25 percent in 2010.
German carmakers in particular have registered double-digit sales
growth by offering fuel-efficient, diesel models at affordable
"With the new models, Hyundai faces the challenge of winning back
domestic customers, whom they have lost to imported carmakers," BS
Securities auto analyst Yang Hee-joon said.
"The key is how to differentiate the AG from other large cars so
that they don't eat into each other's sales."
South Korea is one of the few national markets dominated by domestic
carmakers, with Hyundai and Kia accounting for about 70 percent of
passenger car sales last year.
($1 = 1021.3500 Korean Won)
(Editing by Stephen Coates)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.