Thursday, October 30, 2008

Hyundai Genesis to compete with BMW, Lexus

There was a time when South Korean carmaker Hyundai was considered absurdly precocious in challenging Toyota in the U.S. That was more than 3 million sales ago.

Now, they're taking on Lexus.

The world's fifth-largest automaker, Hyundai -- yes, Hyundai -- sees its first rear-drive luxury car, the Genesis, as a worthy rival to the Lexus ES 350. And no one's laughing.

There's no laughter at BMW or Mercedes-Benz, either, when Hyundai compares the Genesis with the 5-Series and E-Class, respectively. And at much lower cost.

Hyundai began selling the Genesis in July with a 3.8-liter, 290 horsepower V-6 bearing a price tag of $33,000, which is $340 less than BMW commands for the compact 328i and only $200 higher than the average price of a new car in the U.S. this year.

Now comes the 4.6-liter V-8 with 368 horses that propel the rear-drive sedan from zero to 60 mph in 5.7 seconds.

With a base price of $38,000, the V-8 is expected to secure a place for Hyundai on the wish lists of people shopping the Lexus ES 350, Chrysler 300C, Pontiac G8 and the Cadillac CTS, among others.

"We're aware there's a segment out there that won't consider a luxury vehicle unless it has a V-8," said Michael Deitz, manager of product development for Hyundai Motor America. "It's not just about horsepower today -- it's about efficiency."

Hyundai has always done a magnificent job in the styling department, borrowing cues from the best in the business. So it was not surprising that Genesis fit the fashion scene of Miami Beach and Coral Gables, where the V-8 cruised quietly in a recent demo tour, loaded to the gills with luxury features.

The nicely proportioned body rides on a 115.6-inch wheelbase that is more than 3 inches longer than that of the Lexus GS and more than an inch longer than the Infiniti M's.

The Genesis face is predatory, with a tapered aluminum hood framed by backswept high-intensity headlamps resembling the eyes of a raptor. A trapezoidal grille with winglike vanes accentuates the curvature of the snout above a low-to-the-ground air scoop that represents the predator's mouth.

The aerodynamic roofline flows back onto a short deck and a blunt rear end tightly tucked and decorated with wraparound taillamps.

To achieve instant credibility in the premium market, Hyundai had to provide more of everything at an unbeatable price: More horsepower than a Lexus GS and Infiniti M, better longitudinal balance than a Lexus ES 350, bigger disc brakes than a Mercedes-Benz E550, better aerodynamics than a BMW 5-Series and Cadillac CTS and faster acceleration from zero to 60 mph than the BMW 750i (6 seconds) or the Lexus LX 460 (5.9).

The new Tau V-8 has more horsepower per liter than any of its V-8 competitors and outperforms all V-8 performance sedans with an EPA fuel-economy estimate of 17 city miles per gallon and 25 highway, according to Hyundai research.

But where Genesis really exceeds expectations is in its load of standard equipment. A $36,000 Genesis 3.8 with the Premium Package Plus is $8,000 less than a comparably equipped Infiniti M35 and $22,000 less than a comparable BMW 535i.

Standard on the 3.8 models are 17-inch alloy wheels, fog lamps, automatic headlights, dual power heated side mirrors with turn signal indicators, leather upholstery with heated power seats, proximity entry with electric push button start, leather-wrapped tilt steering wheel with audio controls, dual automatic climate control, AM/FM/CD stereo with auxiliary input jacks and Bluetooth.

When you move up to the 4.6, you get 18-inch hyper-silver alloy wheels, chrome lower body-side moldings, power glass sunroof with tilt and slide, power tilt and telescopic steering column, integrated memory system, Lexicon 15-speaker surround-sound audio system, six-disc CD changer, illuminated scuff plates, wood-trimmed leather steering wheel, electrochromic auto-dimming interior rearview mirror with Homelink and compass, power rear sunshade and rain-sensing wipers with auto defogger windshield.

In another extreme measure to challenge the luxury market, Genesis has even matched the Rolls-Royce Phantom as the only other car to offer a Lexicon-branded audio system featuring Logic 7 technology. The surround-sound audio system includes an 11-channel digital amplifier and 17 speakers producing more than 500 watts of sound in 7.1 discrete audio. Hyundai also claims to be the first popular brand to offer digital HD Radio from the factory.

Navigation-equipped Genesis models also include a 40-gigabyte hard drive and XM NavTraffic. The Genesis also comes standard with XM Satellite Radio with a three-month free subscription.

Continuing the coverage that helped overcome early doubts about Hyundai quality, the Genesis warranty includes five-year/60,000-mile bumper-to-bumper protection, 10-year/100,000-mile limited powertrain warranty and seven-year/unlimited mileage anti-perforation coverage. Buyers also get free 24-hour roadside assistance for five years.

Although Hyundai cannot match the prestige of such names as Infiniti, Lexus and Acura, it can grab a piece of the market that wants luxury at a more affordable price. Hyundai at one time considered creating a luxury brand for models such as the Genesis but decided the cost was too high for the rewards.

Hyundai was wise in moving gradually upmarket from its current position, avoiding the marketing boondoggle of Volkswagen's exotically priced Phaeton.

So far, the Genesis is selling well, and Hyundai predicts a total of 20,000 sales in the first year of production.

"Consumers are showing their vote of confidence and that they will step up for a Hyundai," Deitz said.


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