Facing fierce competition in South Korea and international markets, the automaker is preparing a major redesign for two of its key models, but industry insiders question whether the new models are too conservative for international tastes.
Free trade deals opened the door for U.S., Japanese and European rivals on the local South Korean market, who are chipping away at its share in a market where it is accustomed to dominating.
To better compete, the company plans to launch a new, significantly redesigned version of its Genesis large car as early as next month, and a revamped Sonata mid-sized sedan early next year, although neither is likely to carry a new engine.
Hyundai is expected to tone down Sonata’s bold lines and curves in a bid to appeal to a broader audience and boost sagging volume growth, particularly at home. But that could backfire in other vital markets such as the United States, where its flashier style is popular and has helped Hyundai establish a credible presence over the past few years.
“The two new models are the first to reflect Hyundai’s more moderated version of its design language, and are key to energizing its growth,” said Sang Alexander Koo, a professor and former designer with Hyundai’s affiliate Kia. “While the new Sonata will help embrace conservative consumers, it will not have as much impact as the current model did… The new Sonata could draw as much a divisive view as the current model. Some will say the change is weak and others may like it because it’s more moderate,” Koo said.
Expectations are already running high that the overhaul of an ageing lineup will help Hyundai raise prices and bounce back from what is likely to be its first earnings decline since 2008 this year. Hyundai shares are trading near a record high after jumping 18 percent over the past three months, outperforming Toyota, GM and VW.
The new models come at a critical time for Hyundai and Kia, which are trying to rebuild their reputation after a massive recall in the United States and an embarrassing admission that their much-touted fuel mileage claims were overstated on more than one million cars.
) - Tuesday, October 22nd, 2013 - filed under Hyundai
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