November 06, 2015 13:42
Hyundai announced ambitious plans Wednesday to turn the Genesis into an independent luxury brand and take on a global market scaled at W200 trillion annually (US$1=W1,140). The market has been bucking all trends and growing around 10 percent each year over the past five years as the top one percent got richer while the rest struggled.
Mercedes-Benz, BMW and Audi account for two thirds of the market. Other recent entrants with their own luxury brands are Japan's Nissan and Honda and France's Peugeot Citroën, but so far they have not managed to crack the competition. The only automaker to succeed recently has been Toyota with the Lexus brand, which grabbed a 6.9 percent share. Genesis faces tough odds.
Hyundai's major breakthrough in the key U.S. market came in the late 1990s when it offered a radical, 10-year, 100,000-mile guarantee, which had been unheard of there. Everyone doubted Hyundai would be able to survive but was proven wrong.
In fact, the bet paid off handsomely through increased sales and Hyundai became the world's No. 5 automaker. If it focuses all of its resources it should be able to achieve its latest goal too.
It has been many years since Korean manufacturers found themselves in such a tight spot, trying to catch up with Japan while worrying about Chinese rivals coming fast from behind. Due to the global economic slump, Korean manufacturers saw revenues shrink for the first time ever last year, while exports have been declining for the past 10 months.
The only way they can survive now is through innovation and creativity and by making products everybody wants to buy. Samsung developed the Galaxy series of smartphones that now dominate the global market alongside Apple's iPhone.
Korean cosmetics and pop culture have given rise to other Korean brands that are doing very well around the world. But they are comparatively small, and more are desperately needed for a country so dependent on exports. Genesis may be a step in the right direction.
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