Hyundai Genesis: The Right Car at the Wrong Time

The trend is toward smaller and more fuel efficient and, for years, Hyundai and Kia gave such vehicles to the hungry American public.

Now the two Korean automakers are going upscale. But the market in the U.S. appears to be ignoring the fact and continuing to go for the cheaper and more fuel efficient cars Sales of the Hyundai Accent, the Kia Spectra, and the Kia Rio are up this year.

Hyundai’s near luxury model is called the Genesis. Starting price is an affordable $33,000, and buyers have the option of a V8, the first ever offered by Hyundai. Hyundai expects to sell 8,000 units this year and then it hopes to sell 20,000 units a year.

Kia’s luxury model is a midsize SUV called the Borrego. It is built on a truck platform, going against the trend with most auto makers. The Borrego has a starting price of $31,745.

Can such vehicles sell? Hyundai and Kia are both experiencing what other auto makers are facing. Sales of smaller cars that are fuel efficient are good but luxury models and SUVs are not doing so well. Kia has said that it expects to double sales in the U.S. from 2006 to 2010. But with the way the economy is along with other influences on the market, that target had to be pushed back.

Additional details can be found at the original post. Our take? While we give kudos to Hyundai/Kia, we think its push to luxury status is coming at the wrong time. Also, how can anyone take them seriously as a luxury brand when you have Genesis sitting next to the Accent? There's a reason Ford does not sell its namesake brand in a Mercury/Lincoln dealership.

via Business Week