Tuesday, January 11, 2005

Charles V. Tines / The Detroit News Bob Cosmai, president and CEO of Hyundai Motors of America, introduces the 2006 Sonata.

World Auto View

Hyundai aims for clear brand identity

Seoul-based maker of Hyundai and Kia aims for global sales of 5 million units by '10.

By Christine Tierney / The Detroit News

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There's no mistaking the difference between the Ford and Jaguar brands, although both belong to Ford Motor Co. But how does the Hyundai brand differ from Kia?

Both are part of Korea's Hyundai Motor Co., both offer good value and both are enjoying new sales success in the United States.

In 2004, the Hyundai brand's U.S. sales rose 5 percent to 418,615 vehicles, and Kia sales jumped 14 percent to 270,055. Hyundai is aiming for a 15 percent gain in U.S. sales this year, even though most analysts expect the market to be flat.

Now, as Seoul-based Hyundai strives for higher sales -- the Korean automakers are aiming for combined global sales of 5 million units by 2010 -- it wants to establish clear and distinct identities for the two nameplates so they don't don't end up battling each other in the market.

The Hyundai brand will be positioned as the "refined and confident" nameplate. The new mid-size Sonata sedan, unveiled Monday at the North American International Auto Show, was engineered to fit the bill.

The new Sonata will be priced at less than $20,000, but the model was designed to offer more than just good value.

Competing in the segment dominated by the Camry of Toyota Motor Co.p. and the Accord of Honda Motor Co., the 2006 Sonata offers spacious interior for a car of its class, a quiet ride, a choice of new engines and plenty of standard safety equipment.

Kia, on the other hand, aims to establish an identity as a sportier, more youthful brand.

Whereas Kia previously built vehicles on Hyundai platforms to save money, the automaker is now developing "standardized integrated platforms" for both brands that allow for different styling. A good example is the development of the Hyundai Tucson and Kia Sportage SUVs -- they share the same underpinnings yet look quite different.

Hyundai's strategy will face a big test next year when Kia launches the Optima, built on the same chassis as the Sonata.

"The company has been pushing very hard to differentiate the models and brands," said Bob Cosmai, CEO of Hyundai Motor America.

Last year, Hyundai established separate design teams for the two brands at a new $30 million Design and Technical Center in Irvine, Calif. The new strategy should eliminate confusion.

Hyundai will launch the 2006 Sonata, built at its new $1.1 billion plant in Alabama in the spring. It will roll out the next-generation entry-level Accent in the summer, an XG replacement sedan in September and a new minivan in November.

Next year it will introduce a slightly larger, second-generation Santa Fe sport utility vehicle. The new Santa Fe also will be built in Alabama.

The Hyundai brand also is considering developing a pickup, a larger SUV and a Pacifica-style crossover to spur growth in U.S. sales, which have more than quadrupled since 1998.

Hyundai also is building a $117 million Technical Center in Superior Township, and is opening a proving ground in California's Mojave Desert.

Once dogged by reliability problems, Hyundai tied for second place last year in J.D. Power and Associates' Initial Quality Survey. As U.S. and Japanese automakers vie for the industry's top ranks, they are keeping a close watch on this up-and-comer's rapid, impressive strides.

World Auto View You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.