Hyundai unveils new luxury sedan in Korea to compete with BMW

Hyundai unveiled a new luxury sedan in South Korea as the country’s largest automaker seeks to defend its most profitable market from BMW and Mercedes-Benz.

The carmaker introduced the new front-wheel-drive premium sedan, codenamed AG, at the Busan International Motor Show Thursday. Hyundai, which also showed a diesel version of the Grandeur sedan for the first time, plans to begin sales of the AG in the second half of the year, the Seoul-based company said.

The AG comes after deliveries in South Korea, where Hyundai got 44 per cent of its revenue in 2013, fell for two consecutive years as BMW, Mercedes-Benz and Audi lured buyers with imports of 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.

“Our high-end customers seeking to move up from the Grandeur sedan started to turn to imported brands,” Kim Sang Dae, director at Hyundai’s domestic marketing group, said in an interview. “The price gap between the Grandeur and the Genesis, which are priced at around 30 million won and 50 million won, respectively, seemed to play a part.”

The AG is Hyundai’s answer to the customers’ demand for a premium car above the Grandeur and the company is planning on pricing the new AG at around 40 million won, Kim said.

Korea accounted for 66 per cent of the company’s global premium sedan sales in 2013, according to company figures.

This year, sales of Hyundai’s revamped Genesis luxury sedan, which was introduced in November, jumped more than threefold in the quarter ended March. That helped Hyundai’s premium sedan deliveries rise 23 per cent from a year earlier, according to data on the company’s website. It also helped sales rise for the first time in four quarters in South Korea, the data shows.

“By introducing a new premium sedan, the company will be able to offer a more refined lineup of models, which will help it secure its market share in South Korea,” said Shin Chung Kwan, an analyst at KB Investment & Securities Co.

For Hyundai, competition is getting tougher in overseas markets including China, where the carmaker ranks fourth in sales among foreign automakers.

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