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Old 08-28-2012, 03:39 PM
HugH HugH is offline
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KOREA - Competition heated in luxury sedan segment

The Korea Herald > Business > Automode(***51452;1***54924

Competition heated in luxury sedan segment

2012-08-26 19:20 Text

Hyundai Motor bolsters marketing to battle BMW, Mercedes in Gangnam

Korean automakers are set to reinforce marketing of large sedans at home, as their sales in the lucrative premium segment continued to be eroded by import brands.

Though Hyundai Motor is posting record-breaking sales of the Equus, Genesis and Grandeur sedans in major overseas markets including the U.S., the company had to suffer a heavy drop in share of the local upscale market.

In the case of the Equus sedan, Hyundai posted 6,449 units in sales of the premium luxury model between January and July, down about 25 percent over the same period last year.

Hyundai and four other major players, including Kia Motors, saw their combined sales of large sedans fall by 13.8 percent on a year-on-year basis.

Their January-July sales dropped from 30,661 units in 2011 to 26,419 units in 2012.

In contrast, import brands such as BMW and Mercedes-Benz reported a 17.9 percent on-year growth to post 6,304 units in collective sales.

The BMW 7-Series

In a bid not to hand over more share to import brands, Hyundai Motor and its affiliate Kia Motors plan to open premium segment-oriented showrooms in Nonhyun-dong, southern Seoul in the affluent Gangnam district, where major import brands have been operating showrooms for more than a decade.

"The new Equus will be released during the second half," a Hyundai executive said.

He said it will be the first face-lifted Equus model since the current designs were unveiled in March 2009.

The Hyundai Motor Equus

The nation's largest automaker also plans to enhance street marketing of the new Genesis, which was unveiled in June.

As a customer gratitude event, the company is thinking about offering opportunities for golf and yachting, targeting high-income customers.

Kia is mapping out new marketing projects to attract more local consumers of the K9 sedan as the company saw a weaker-than-expected performance in the upscale market.

Major import brands will accelerate the introduction of new models during the second half amid brisk sales, despite weak consumption in Korea.

The Mercedes-Benz S63 AMG

Mercedes-Benz will unveil several models of the next-generation S-Class, which involves the S350, S500, S600 and S63 AMG next year.

By country, Korea ranked fourth in the German carmaker's global sales of the S-Class. Mercedes-Benz Korea sold 2,321 units of the series in 2011.

In a similar vein, BMW will release a updated model of the 7-Series in early August.

The No. 1 import brand in Korea is seeking to further encroach on the share of Hyundai and Kia by attracting more consumers and making the best of tariff benefits from the Korea-EU Free Trade Agreement.

Import brands are competing to attract drivers of Hyundai and Kia's large-segment sedans.

BMW Group Korea has cut car prices by 1.43 percent, which is about 900,000 won ($760) off the BMW 528i sedan priced at 67.9 million won.

Mercedes-Benz Korea made price cuts of 1.44 percent, or 1 million won, to the E300 Elegance sedan.

Audi Korea cut 1.41 percent, or 700,000 won, off the A4 2.0 TFSI Quattro and Volkswagen cut prices for the Golf and CC models.

Other European players, including Peugeot and Jaguar-Land Rover, followed suit in the local market.

In Korea, Lexus, Toyota Motor's premium brand, slid to eighth in 2010 sales ranking for imported vehicles after coming fifth in 2009, while German players ***8213; BMW, Mercedes-Benz, Volkswagen and Audi ***8213; made up the top four.

While Hyundai Motor is yielding a certain portion in the large segment at home, it is boosting its presence in the U.S. premium market with its Genesis and Equus vehicle grabbing influential shares of sales.

The automaker saw its Genesis sedan hover at 10 percent of the North American market in the mid-luxury class for the first time this year.

Hyundai also has been successful in the premium-luxury sedan market as the Equus' market share surpassed 5 percent so far this year.

Considering that Hyundai Motor only began selling the Equus in December 2011, there is a possibility that its share could be equivalent to that of the Genesis in one or two years.

"Sales of the Genesis and Equus go beyond our expectations," a company spokesman said. "We forecast sales of the sedans to reach more than 30,000 and 3,000 units, respectively, this year in the U.S."

By Kim Yon-se (kys@heraldcorp.com)

Last edited by HugH; 08-28-2012 at 03:42 PM.
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