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How This Automaker Prepares to Take On Volkswagen, BMW and Mercedes

May 29, 2014 | About:
Quantum Research

Quantum Research

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Hyundai Motor (HYMTF) unveiled a new luxury sedan, a revamped version of Hyundai Grandeur in South Korea. Bloomberg reports that the company made this move to defend its most profitable market from German foes Volkswagen (VLKAY), BMW (BAMXF) and Mercedes Benz. The carmaker introduced the new front wheel premium sedan at the Busan International Motor Show today. The company is facing increased competition in the overseas market as well. Let’s see how the company is working to gain strength in both home and foreign market.

Reasoning out the Move

Hyundai showcased the diesel version of the Grandeur as well, known as Azera, for the first time. The Korean major plans to begin sales of the car in the second half of the current year. The Grandeur comes after Korea suffered setbacks in its home market where deliveries declined for the second consecutive year in 2013. Hyundai is the Korea’s largest automaker which explains the importance of the market as a revenue contributor. Despite weak sales Hyundai earned 44% of its revenue in 2013.

The auto player is facing severe competition from BMW, Mercedes Benz, and Volkswagen. These foreign carmakers are luring buyers with their imported fuel efficient diesel models. Hyundai is counting on the new sedan to boost annual sales and help offset profit declines overseas amid a strengthening won. Korea accounted for 66 percent of the company’s global premium sedan sales in 2013 according to the company’s figures.

What to Expect?

The Grandeur facelift brings about a reshaped front bumper with LED fog lamps, a new grille, and an updated high gloss two toned rear bumper. The diesel version of the model will be equipped with a Euro 6 compliant 2.2 liter R diesel engine with 202 PS and Nm of torque. While the petrol version would sport a 2.4 liter Theta ll GDI petrol engine delivering 190 PS and Nm of torque.

The motor driven power steering has been tweaked to give greater handling responsiveness and stability. The interiors has been treated to enhanced audio equipment, a remodeled centre console with new climate controls, in addition to a new eight inch navigation screen. The security guards comprise blind spot front collision warning, and lane departure warning system. While convenience features include Advance Smart Parking Assist (full auto park, parallel and vertical) and smart trunk which automatically unlatches boot if key is detected nearby for more than three seconds.

Performance Beyond the Home Turf

For Hyundai, competition is getting tough in overseas markets including China, where the carmaker ranks fourth in sales in comparison to foreign automakers. The company’s 8.8 percent growth in China last quarter lagged behind an industry wide expansion of 10 percent. China is presently the top auto market where cars are selling like hot cakes. American automaker Ford Motor (F) saw its China deliveries surge 45 percent in the first quarter of the current year.

Hyundai’s sales in the U.S., the company’s biggest market by volume after China, fell 2.6 percent in the first quarter. In March, Hyundai unveiled a revamped Sonata, targeting sales to touch 63,000 in Korea and 165,000 units overseas during the year. The Sonata, Hyundai’s most important new model this year, made its U.S. appearance at the New York International Auto Show last month. The new version could help the Asian carmaker record higher sales in the U.S. and post better revenue in the coming quarters.

The Takeaway

Hyundai Azera Grandeur has been built to meet the needs of the local consumers. It showcases the refreshed Grandeur that has upped the ante in terms of performance and amenities. The car is Hyundai’s answer to customers' demand for a premium car. This could help the auto major regain share in the home market and contend with intensifying competition.


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