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As profits sag, Hyundai seeks to regain edge – with sports cars

By

Reuters


Published:
17:19 EST, 15 September 2015

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Updated:
17:19 EST, 15 September 2015

By Sohee Kim

NAMYANG, South Korea, Sept 16 (Reuters) – South Korea’s
Hyundai Motor Co, whose former growth was driven by
value-for-money vehicles, is developing sports cars in its
latest attempt to spruce up its brand image while it tries to
stem a slide in mainstream sales and profits.

At the Frankfurt Motor Show on Tuesday, Hyundai presented
concept and rally cars using technology from its new “N”
sub-brand – named for German race track Nurburgring and its own
Namyang research and development centre. The cars are meant to
give a glimpse of features like new powertrains and slick
handling devised in a high-performance push led by a 30-year
veteran engineer hired away from Germany’s BMW AG.

Emulating German rivals has become a feature of strategy at
Hyundai, the world’s fifth-largest automaker by sales along with
affiliate Kia Motors Corp, as firms like BMW and
Volkswagen AG have grown in its backyard. While its
niche luxury Genesis sedan is selling well, Hyundai has slid to
six straight drops in quarterly profit on weak sales of the
mass-market sedans which fuelled its rise.

“Hyundai doesn’t stand for high-performance car…not yet,”
said Albert Biermann, the 58-year-old former chief engineer for
BMW’s “M” sports car brand. Biermann spoke in a recent group
interview at Hyundai’s Namyang facility just outside Seoul,
where Peter Schreyer, another German, holds sway as design chief
for both Hyundai and Kia.

“This will change,” said Biermann, who joined Hyundai in
April to head up development of high-performance models at
Hyundai and Kia. “There’s a clear commitment and a plan to
develop and sell a high-performance car.”

Hyundai officials declined to disclose financial targets,
investment, pricing or strategy details for N sports car models.
But Biermann said he expects Hyundai will start selling its
first car under the sub-brand within two years, with a target
audience that goes beyond a niche market.

“We will perform on the competitive level, but we will try
to make these cars available for the wider customer base,” said
Biermann, the second-highest-ranking foreign executive at
Hyundai after design guru Schreyer.

Analysts said developing a reputable high-performance brand
will take Hyundai time. BMW’s M and the AMG line produced by
Daimler AG’s Mercedes-Benz have been around for
decades.

But they said the gambit is a positive long-term move for
the automaker.

“Hyundai will lag behind the global auto industry if it does
not develop high-performance and eco-friendly technology,” said
Kim Pil-soo, a professor of automotive engineering at Daelim
University.

(Editing by Tony Munroe and Kenneth Maxwell)

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