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The Dude
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Hyundai Equus: White knight or dead horse?

While other auto companies are rapidly shifting into reverse, Hyundai is pushing forward with plans to introduce its first super-luxury sedan, the Equus, to America. First seen at the New York International Auto Show, the Equus will be displayed nationwide this summer as Hyundai seeks to gauge public reaction to this high-end model. (See "The Genesis of Hyundai’s luxury brand?")

In Asian markets, the Equus competes with the prestige-brand flagships such as the BMW 7 Series, Lexus LS, and Mercedes-Benz S-Class. It’s a big, rear-drive cruiser that is a step up in size and price from Hyundai’s upscale Genesis sedan, upon which it is based. Should the Equus be sold in the U.S. market, it would likely come with the same 375-hp, 4.6-liter V8 used in the top-trim Genesis, plus the full panoply of high-end, high-tech interior amenities one expects in the luxury class.

South Korea’s Hyundai has come a long way from the old cheap-and-crummy days to become one of the top brands in quality and reliability. The Equus shows just how far the company has come.

Today, we recommend most current Hyundai models we’ve tested, which is nearly all of them., The question for consumers is how much “image” they’re willing to give up for the sake of underlying quality and value. The luxury market is hard club to join, since so much depends on positive buzz and intangible curb appeal. The key issue of price is not yet settled, either. USA Today speculated that the Equus would weigh in at around $75,000, comparable with the base BMW, Lexus, and Mercedes-Benz flagships. But that’s not the formula Hyundai has followed so far, or indeed, the formula used by Toyota when it launched the Lexus brand. To succeed, the price would probably have to be lower, say under $60,000.

The Lexus LS met rapid acceptance because it was a terrific car that started out much cheaper than its European competitors, and because it promised Toyota-levels of reliability, something the Europeans still aspire to. Hyundai plowed the same furrow with the Genesis. The V6 version is equipped like a $50,000 car but is priced in the mid-to-high $30s. Therefore, we would expect that Hyundai would try steal a march on the $75,000 luxury corps by starting Equus pricing much lower than that.

Hyundai’s foray into the deep end is not so much a plunge as a toe in the water. The Equus has already launched in South Korea, and the company plans to import only about 100 of them into the U.S. this summer, serving equal parts consumer survey and marketing tool. This approach has much upside, and it reduces the risk of a potential flop, like Volkswagen had with the pricey, heavy Phaeton a few years ago. If the Equus has legs, then Hyundai will have only to ramp up production for its U.S. model as needed.

How do you think the Equus would be received in the States?

—Gordon Hard

Hyundai Equus: White knight or dead horse?: Consumer Reports Cars Blog
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