Can Hyundai/Kia Redefine The American Market's Luxury Car?

Bill Crittenden
February 14, 2014

I had a wonderful experience last year taking my father-in-law to a Hyundai dealership and getting him into an Equus.  He's an old-school a fan of big American cars and didn't look too kindly upon a kid with a 1997 Accent GT dating his daughter.  But back then, Hyundai was just starting to look above the bottom segments of the market.

He was impressed with the Equus, to say the least.  It was a whole different world away from the cutesy Accents and affordable Elantras, a world away themselves from the Excels with which Hyundai made its first impressions on the American market.  The Equus had everything a person could want on a luxury car, and cost tens of thousands less than a comparable Lexus or Mercedes-Benz or BMW.

The dealer, after the sales pitch, after I told him about my history with Hyundai and told him what I do now, and just talking to me about what it's like to sell luxury Hyundais, said he constantly met people who were impressed with the car, but really still wanted that Mercedes or BMW.  Some admitted that they didn't know a lot about cars, to them it was a matter of having the badge: it's a status symbol.

To a connoisseur of high-end cars, someone who drives cars to their limits and can feel subtle differences in chassis or drivetrain, the Germans still have the upper hand.  But what about the accountants, the real estate developers, the regular folks who haven't had the experience of a Jeremy Clarkson?  Do they care about the tiny details?  Do they even notice many of them?

It's not like Hyundais are cheap knockoffs anymore.  They've come a long way from stuffing Mitsubishi engines into economy bodies, becoming one of the most innovative and prolific developers of new technology in the marketplace.  If you were to set aside brand reputation and judge the cars alone, and judge them as people who are professionals at any field besides writing about expensive cars, Hyundai stacks up incredibly well against the competition even before the vast chasm in price is taken into account.

Kia has joined this game recently, as well.  After a few years under Hyundai's wing, incorporating Hyundai's technology into Kia's lineup after merging, Kia has been able to follow Hyundai very closely into these new markets, first with the Cadenza and now with the K900.  Kia has had its own first-impression issues in the American market, originally known for the oddly named Sportage and their name's resemblance to the acronym for "Killed In Action," and more recently with the hamster-themed Kia Soul advertisements, but Kia's styling from the Forte Koup on up have been a hit.

So we have a question as to what constitutes luxury in the American car market.  For practical luxury, for getting size, power, and features, Hyundai and Kia can set a new standard for what a car can include and what people expect to pay for a top-line car.  Perhaps, to buyers interested in this type of luxury, Hyundai and Kia will be their new Coach purse standard of quality, relegating the larger Mercedes and BMWs to Louis Vuitton status: you just bought it to show off how much money you can spend.  Hard to imaging?  We already see attitudes like this reflected in the sports car market with the difference between the owners of "budget supercars" like the Nissan GT-R and the stereotypical Ferrari buyer ("self-indulgent wieners with too much bloody money!" as one film puts it).

While it remains to be seen whether or not the broader market will go along with this, I know at least two pragmatic buyers who, if in the market for such a car, would happily hand a much smaller check over to Hyundai than pay tens of thousands of dollars more to have a German badge to show off.