Hyundai Motor goes conservative with redesigned Sonata, Genesis

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An employee of Hyundai Motor walks past the company's luxury sedan 'Genesis' displayed for visitors after its annual general meeting of stockholders at the automaker's headquarters in Seoul. (Reuters) An employee of Hyundai Motor walks past the company's luxury sedan 'Genesis' displayed for visitors after its annual general meeting of stockholders at the automaker's headquarters in Seoul. (Reuters)
SummaryHyundai is facing fierce competition in its home market of South Korea.

Motors Co .

The automaker is expected to report on Thursday its July-September quarter net profit was little changed from a year earlier at 2.19 trillion won, according to Thomson Reuters I/B/E/S. For 2013, profit is seen falling 3 percent, but it is likely to rebound to 9 percent next year, according to Thomson Reuters StarMine data.

The Sonata's last big makeover came in 2009, just as the global financial crisis was crushing auto sales. Hyundai opted for a bold style change, which helped it win a record share of the US market and escape the industry-wide downturn largely unscathed.

But the bold look didn't go down well in Korea, its second-biggest market, where conservative styling is preferred. Now Hyundai is facing an uphill battle at home against foreign rivals, which have benefited from free trade deals and taken 12 percent of the market so far this year, up from just 2 percent a decade ago.

It could soon face the opposite problem.

"The new more conservative design might work in Korea, but it could well fall short of the company's expectations in the US and China, those two key markets for volume," said an industry insider who has seen the new Sonata.

"Hyundai people think it its refined, but the car lost the identity it gained with the current model," the source told Reuters.

A second source who has seen the new model told Reuters it looked "like a car from the '80s or the early '90s".

VALUE FOR MONEY

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.

Hyundai's US sales inched up just 2 percent in the January-to-September period, lagging behind the industry's 8 percent rise and its own 4 percent growth target for this year. In South Korea, Hyundai and Kia saw their combined market share shrink to 69 percent in September, from 75 percent last year.

Imported rivals such as BMW, Lexus and Volkswagen are rapidly increasing sales by offering

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