Hyundai’s Genesis luxury brand is making its debut at the Detroit Auto Show, but the automaker is looking ahead, planning to be price competitive on the Chinese market.
There are high expectations from Hyundai for the Genesis division, as the carmaker wants to be more involved in the very profitable premium segment. In this direction, Hyundai announced two weeks ago it hired the former Lamborghini executive, Manfred Fitzgerald, in an attempt to distance itself from the value-for-money brand image andto allure more high-end orientated potential customers. But for the high sales figures that Hyundai is targeting, the Chinese market is the place to be conquered. Therefore, South Korea’s biggest automaker considers making its Genesis cars in China to overcome import taxes that increase considerably the final price of the vehicles. For this plan to be put in motion, Hyundai needs to reach an agreement with a local partner, said Cho Won Hong, Hyundai’s chief marketing officer. “China has a high tariff and that makes our vehicles more expensive than competitors, which makes it difficult to be profitable,” Cho said in an interview. “There are a lot of issues that need to be solved before we could go in. But we will definitely go in.”
China is the biggest market for Hyundai, selling 1,062,826 vehicles in 2015, from the total of 4,964,837 units worldwide. But compared with the previous year, the sales report showed a 5.1 percent fall in China, the first drop since 2007 because of a slowing economy. The automaker has to recover in the country, therefore it has to be price competitive to be able to rival other luxury brands like Audi or BMW. “Hyundai has no choice,” said Heo Pil Seok, chief executive officer of Midas International Asset Management in Seoul. “It’s difficult to expect quantitative growth in the auto market, so companies have to promote luxury models and brands to bring up the profits.”