Hyundai Motor Co. Ltd. plans to shed its historically low prices as the brand accelerates its quality strides.
“When our quality is almost equal to (Tier 1 non-luxury brands), then our prices should be similar,” Steve S. Yang, president and CEO, tells North American media at the auto maker's Seoul headquarters.
Raising the price of Hyundai vehicles is one of the auto maker's “main goals” in the U.S. market and worldwide, he says.
Hyundai already is seeing success in the U.S., John Krafcik, Hyundai Motor America president and CEO, tells Ward's. “Our prices are higher than they've ever been, but our value is perceived to be the highest it's ever been.”
Consumers are responding favorably to the brand's higher-priced vehicles, with transaction prices in the U.S. rising 11% since 2008 and sales up 22.7% through May, he adds.
However, executives admit Hyundai's positive perception is not growing as quickly as its third-party accolades. The new Sonata recently received an “excellent” score from Consumer Reports magazine in a test of family sedans.
Hyundai's goal is to rank in the top-3 OEMs in actual quality within three years and place among the top five in perceived quality in five years, says Charles Bang, director-corporate quality division.
The quality turnaround is credited to Hyundai-Kia Group Chairman Chung Mong-koo, who in 2000 launched the Quality Management Initiative to emphasize customer satisfaction.
The result was a dramatic improvement in quality and customer trust, Bang says. Hyundai has been driving toward matching the quality of industry leaders over the last 10 years.
Yang says Hyundai's reputation will be put to the test with the U.S. launch of the premium Equus car later this year. The luxury sedan will be the auto maker's biggest and most-expensive U.S. model.
HMA officials have said they expect Equus sales to be relatively low, at about 1,000-3,000 units annually. At April's New York auto show, it was said the sedan would start in the mid-$50,000 range.
