Hyundai was once the victim of merciless jokes from US talk show comedians: Question: What do you call a Hyundai with a dual exhaust? Answer: A wheelbarrow. Question: What do you call a Hyundai with a seatbelt? Answer? A rucksack.
But not any more. South Korea’s premier motor group is now firmly established as one of the leading mid-tier global car brands, known for practical, attractive and price-competitive vehicles.
Even petrolheads like Ahn O-jun are smitten. Ahn is a South Korean who reviews luxury cars and supercars for YouTube and who formerly owned a Porsche GT3, but today is a Hyundai man. He drives a Hyundai Palisade SUV for business, a Kia Carnival – Kia is part of Hyundai Motor Group – for family use, and is considering a Genesis GV80.
The Genesis is Hyundai’s luxury brand, while the GV80 is its first luxury SUV. And with Hyundai head-hunting a top BMW man to lead its performance car division, its ambitions are clear.
In autos, surging up the value ladder is critical. Luxury and high-performance cars that sell for chunky margins both improve profitability and enhance the brand image, making them core issues in long-term competitiveness. A third issue is environmental friendliness.
“Carmakers should have a strategy and capability to do well in the luxury and SUV segments and electrification,” Kim Joon-sung, an industry analyst at Meritz Securities, told Asia Times. “These are the areas necessary for carmakers to achieve sustainable growth. Hyundai is seeing positive results in these fields.”
Indeed. Hyundai Motor’s operating profit rose 52% to US$3.09 billion last year, thanks to favorable currency market conditions and rising sales of SUVs and its all-new, premium saloon the Grandeur Azera.
That margin was achieved despite an overall fall in Hyundai’s global unit sales, from 4.59 million vehicles in 2018 to 4.43 million in 2019.
Off-road, in style
The long-awaited GV80 launched this month. The first SUV under the Genesis badge drew strong attention from South Korean customers, recording 15,000 contracts on launch day.
The GV80 comes with a 3.0-liter inline turbo diesel engine, offering output of 278hp. It features advanced driving assist and safety systems, including automated lane changing.
It also has its own DNA.
“There used to be many reminders of famous foreign brands whenever Hyundai released new models – there was always a sense of mimicking other leading carmakers in design, function and driving feel,” said car reviewer Ahn. “But the GV80 is different. It secured its own identity as a luxury car in design and driving feel.”
Ahn admits that the GV80’s performance falls behind German competitors armed with 3.0-liter inline turbo diesel engines. It seems focused on more trouble-free tuning and smooth driving than roaring performance, he suggested.
However, Genesis plans to add 2.5-liter and 3.5-liter turbo petrol motors to its lineup in the near future, with the latter expected to be heavily performance-oriented.
The GV80 is priced from 65.8 million won ($57,000) in Korea – substantially cheaper than German rivals like the Audi Q7 (79 million won), the Mercedes Benz GLE (91.5 million won) and the BMW X5 (100.2 million won).
It is built on a new rear-wheel-drive platform, which will be shared with the G80 sedan, which is scheduled to roll out later this year. Genesis plans to expand the model lineup further, with a smaller luxury SUV, the GV70, later this year.
The Genesis is now sold in the Middle East, North America, Russia and South Korea, but Hyundai has wider horizons for the brand.
“The Genesis will make an entry into the European and Chinese markets in the near future, which are currently under feasibility studies and thorough market research,” a company spokesperson told Asia Times. “Both are key markets full of opportunities for a young brand like us.”
Stepping on the gas
It is not only luxury – Hyundai is also going high-performance. To seize that market, it has retained former BMW M division boss Albert Biermann as head of its R&D Center – closely connected with its N division, which creates high-performance cars. Although it sounds suspiciously like BMW’s M division, the N division is, in fact, named after the city – Namyang – where Hyundai’s R&D center is located – and the famous German Nurburgring motor sports track/test track.
Since Biermann arrived, Hyundai has rolled out the i30 N sports cars for Europe and Veloster N for South Korea and North America. Both have been praised for their driving pleasure on both sides of the Atlantic, and the Veloster N won Road & Track’s Performance Car of the Year award in 2019.
Hyundai plans to extend the N lineup and is considering a “midship” sports car to rival Porsche’s Cayman. A midship sports car has its engine placed neither either front or back, but in the location of the rear seat, boosting stability. Ferrari and Lamborghini supercars also use this layout.
“In 2012, Hyundai embarked on a project called RM (Racing Midship) to develop and connect new high-performance motorsports technologies with future N models,” Thomas Schemera, the Executive Vice-President and Head of Hyundai Motor Group’s Product Division, told Asia Times.
The RM series is now a not-for-sale prototype.
“Since the initiation of project RM, and via evolution of the RM series (RM14, RM15, and RM16), RM models underwent extensive road testing to validate newly-developed technologies, observe their effects on performance, and improve them for subsequent application on future N models,” he said.
In November 2019, Hyundai unveiled the RM19 Racing Midship Sports Car before global media at the AutoMobility show in Los Angeles. So when might a midship N hit the streets?
“If I think it’s the right time to make a mid-engined N car that can rival a Porsche, and when we think it’s the right time to make that car, we will make it,” Biermann said late last year in an interview with British car magazine Evo. “It’s that simple.”
But that time is not yet. Hyundai is waiting for domestic demand for the high-performance, midship sports car to rise before it starts production. “A mature local market for this kind of car is necessary to secure profits,” an industry expert told Asia Times. “And now seems not to be the right time.”
Meanwhile, Hyundai says it has multiple new N models in both development and in planning.
Electric acceleration
Another element in the portfolio mix is electric and hybrid cars vehicles.
“In terms of global [EV] market share ranking, [Hyundai] rose from 13th in 2016 to 10th in 2017, ninth in 2018 and fifth in 2019,” said Meritz’s Kim.
Hyundai aims to be a global Top 3 electric carmaker by 2025. Hyundai and its sister company Kia plan to sell 670,000 electric vehicles annually by 2025, comprising 560,000 battery-electric vehicles (BEVs) and 110,000 hydrogen fuel-cell electric vehicles – a sub-segment on which Hyundai is betting big.
The goal is to electrify most new models by 2030 in key markets such as South Korea, the US, China and Europe, with emerging markets such as India and Brazil following suit by 2035.
“To consolidate our leadership in vehicle electrification, we plan to operate 44 electrified models by 2025, including 11 dedicated BEV models,” Hyundai Motor Executive Vice-Chairman Euisun Chung said in his new year’s address
According to Hyundai, those 44 models will include 13 hybrids, six plug-in hybrids, 23 BEVs and two fuel-cell electric vehicles. In particular, the BEV lineup will increase to 23 by 2025 from last year’s nine, with the first dedicated BEV to hit roads in 2021. Hyundai will introduce a new EV architecture development system and apply this system to models slated for launch in 2024.
The group’s electrified lineup comprised 24 models in 2019. This year, the group will add hybrid and plug-in hybrid variants to its best-selling SUV models, including the Kia Sorento, Hyundai Tucson and Hyundai Santa Fe.
The upmarket Genesis brand plans to launch its first fully-electric models in 2021, before expanding its electric car lineup in 2024.
The high-performance N brand also plans EVs – in cooperation with Croatian-based EV venture Rimac Automobili. Last year, Hyundai invested 80 million euros in Rimac Automobili, which owns high-voltage battery and electric powertrain technologies – integral components of high-performance EVs.
In buying into Rimac, Hyundai is getting into bed with an aspirational competitor. Porsche is the largest investor in Rimac with a 15.5% stake. Hyundai is the second-largest, with 13%.
“Hyundai Motor Group and Rimac Automobili are currently working together to develop prototypes for an electric version of Hyundai Motor’s N brand midship sports concept car and a high-performance fuel cell electric vehicle by later this year,” said Schemera.