Hyundai has a new car that many analysts believe is equal to BMW, Mercedes and Lexus. It is a real tribute to Hyundai that they have been able to develop such a high quality car.
Hyundai has bought KIA, its Korean rival and seems intent on making KIA the low-price car and Hyundai the higher priced car. Problem is, Hyundai has earned a reputation as a low priced, decent quality car. They have been on the market long enough that this reputation has become crystalized in people's minds. In fact, Hyundai owned the low price-quality category.
To take a car from that category and now convince us that it should be considered a highly differentiated, high price car is a big stretch. Toyota faced this challenge and decided to create Lexus since the Toyota brand could not stretch enough to be considered in the high priced, luxury category. Honda created the Acura and Nissan created the Infiniti for that same reason. Audi, BMW, Mercedes have all expanded their lines downward.
Hyundai is taking a real gamble by trying to stretch so far. It would be far better, in my opinion, for them to create a new brand for the luxury market. However, if they are taking a long-term view (up to 5-years) perhaps they are content to slowly reposition themselves. It seems to be an expensive proposition that could be leap-froged by creating a new brand to go along with the new, highly refined car they have developed.
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