Hyundai Goes the Extra Mile to Move Upscale

(MoneyWatch)  Hyundai seems determined to break out of second-tier status in the U.S. market -- or die trying.

The Korean automaker is about halfway through introducing a remarkable 16 all-new or facelifted models in just over six years, from late 2004 to early 2011. Were the auto industry cliché that "It's all about product" actually true, Hyundai would be be in a terrific position to gain ground on first-tier companies such as General Motors, Ford and Chrysler, plus Japanese giants Toyota, Honda and Nissan.

Michael Deitz, product planning manager for Hyundai's U.S. unit, outlined the company's plans in a May 9 presentation in New Jersey, just as Hyundai was about to introduce an updated model of its Sonata sedan. Next up is an all-new flagship sedan, the Genesis, which has an optional V-8 engine and is due in July. Hyundai is pitching the Genesis as a competitor to luxury imports like Mercedes and BMW that will cost tens of thousands of dollars less.

It remains to be seen whether shoppers will see things Hyundai's way, though, because it's also "all about" brand perception. Hyundai is still saddled with a reputation for cheap, entry-level cars with poor quality, even though the reliability of its vehicles has improved greatly. Some models, for instance, have recently won decent marks for quality from J.D. Power and Associates and positive ratings from Consumer Reports. Hyundai's model range also now includes somewhat more expensive cars, topping off at around $20,000 suggested retail -- and rising. In 2004, Hyundai's most expensive cars were priced under $17,000.

From 1998 to 2001, Hyundai's U.S. sales more than tripled to more than 300,000 a year. In fact, Hyundai is now the No. 4 import brand in the U.S., a development that might surprise many consumers. More recently, though, its rate of growth has slowed. Hyundai's 2007 U.S. sales were 467,009 vehicles, according to AutoData, just 2.5 percent ahead of 2006. Overall, its U.S. sales are still less than half of Nissan North America's 2007 total of just over 1 million cars.

Hyundai and its sister brand, Kia Motors America, have kept a revolving door spinning for U.S. sales and marketing executives the last few years, according to Automotive News. Some were shown the door remarkably abruptly. Both brands belong to South Korea's Hyundai-Kia Automotive Group. In its push for growth, Hyundai apparently won't take no for an answer, not from its executives, or even from the customer.