Hyundai’s Ascent: From Budget Brand to Luxury Leader
Hyundai has experienced a remarkable rise in popularity over the past two decades. The brand has evolved from a purveyor of inexpensive vehicles to a manufacturer of sophisticated, high-tech cars, including performance models designed to challenge BMW’s M Division. This evolution culminated in the creation of the Genesis brand, a luxury division now rivalling industry leaders.
Genesis G90
The Genesis of Hyundai
Hyundai Motor Company was founded in 1967 by Chung Ju-yung, following the establishment of the Hyundai Engineering and Construction Company in 1947. The company’s initial foray into the automotive market involved the Ford Cortina, produced in collaboration with Ford in 1968. The following year, Hyundai introduced its first self-developed car, the Pony. From its humble beginnings in affordable vehicles, Hyundai consistently gained recognition for its reliability and value for money. Today, Hyundai’s ventures encompass a wide range of technologies, including combustion engines, hybrids, electric vehicles, and even hydrogen mobility solutions and robotics.
Genesis, initially launched in 2004 as a Hyundai model (the Genesis sedan), was rebranded as a standalone luxury brand in 2015. This strategic move mirrored the approaches of Toyota’s Lexus and Honda’s Acura divisions. The G90 has become a symbol of Korean luxury in a market historically dominated by German manufacturers, and with plans to introduce a Magma performance sub-brand, Genesis is poised for further expansion. This ambition showcases Hyundai’s transformation from a brand with limited luxury offerings to a serious contender against Mercedes-Benz, BMW, and Lexus.
Hyundai’s Journey in the US Luxury Sector
Hyundai’s early vehicles in the US, primarily focused on affordability, did not initially signal its future luxury aspirations.
Key milestones in Hyundai’s luxury journey:
- 1998: XG350 launched as Hyundai’s first luxury car in the US.
- 2006: Azera replaces the XG350 as the flagship model.
- 2008: Genesis model introduced, further developing the luxury recipe.
- 2015: Genesis brand established as a standalone luxury division, offering more advanced vehicles.
- 2020: Genesis sales surpass 100,000 units for the first time.
- 2021: Genesis sales exceed 200,000 units.
Early Attempts: The XG350
Hyundai’s foray into the luxury market began with the XG350. While the brand offered larger, more luxurious models in its home market, the XG350, launched in 1998, marked Hyundai’s first attempt at the high-end segment in the US. Marketed across the Atlantic, it was intended to be the brand’s most luxurious and expensive offering, signaling a move towards the premium market.
The XG350 boasted a prominent chrome grille, leather and wood-trimmed interiors, and a comprehensive set of features that included automatic climate control, electrically adjustable leather seats, and a premium sound system. The longer “L” model offered an electronic moonroof and additional cabin space. The 3.5-liter V6 engine, while adequate, didn’t quite match the performance of engines in rivals like the BMW 7-Series or Lexus LS. The main criticism of the XG350 focused on its refinement, including its suspension and interior quality, which fell short of competitors. Despite its shortcomings, the XG350 represented a significant step forward, highlighting Hyundai’s commitment to establishing itself in the luxury segment.
The Azera: Progress and Improvement
The Azera, which replaced the XG350 in 2006, demonstrated Hyundai’s ability to learn and improve. It featured a more powerful and refined 3.8-liter Lambda V6 engine that produced 263 horsepower and included more standard safety and comfort features than its predecessor. Hyundai began to directly challenge its competitors, emphasizing that the Azera offered more interior space than the BMW 7 Series and Mercedes-Benz S-Class at the time.
While updates to comfort and features like the ones on the Azera were well-received, Hyundai needed to improve its refinement. The Azera marked a significant step forward, reducing exterior noise and revising the suspension to work better with a stiffer chassis, resulting in a smoother ride than the XG350. Despite these advancements, Hyundai was still working to compete with luxury brands like BMW, Mercedes, and Lexus. These brands had a long established reputation as premium automakers, and Hyundai was still working to overcome its history as a budget manufacturer. The 2008 Genesis represented another step forward, Hyundai realized it had to take a more radical step in order to truly capture the luxury market.
Genesis: A Luxury Brand is Born
Recognizing the limitations of the Hyundai brand, the company took inspiration from Toyota, Nissan, and Honda, which had all launched their own luxury divisions. Genesis was established in 2015, and the difference was immediately clear. The brand launched in the US in 2016 with the G80 and G90 models. By this time, Hyundai had incorporated lessons learned from developing the earlier luxury models. The first Genesis vehicles could compete with the world’s best luxury cars in terms of refinement, technology, and driving dynamics. The brand’s success has been rapid, with annual sales increasing since its inception. In 2019, Genesis sold just over 77,000 vehicles globally, a number that had increased to nearly 230,000 by 2024.
Genesis Today
Genesis has utilized a new design language distinct from Hyundai’s more affordable models. The distinctive oval/triangle hybrid grille has become synonymous with the brand. Vehicle designs merge angular and sporty lines with elegant and modern ones.
With a focus on matching its international rivals in the areas of equipment and prestige, Genesis has carefully managed its pricing. The G90, for example, starts from less than many of its primary competitors.
In a relatively short period, Genesis has established itself as a real player in the luxury vehicle market. The rapid progress of Genesis over the past two decades suggests that established luxury brands should anticipate increased competition from Hyundai’s luxury division.
Sources: Hyundai, Genesis
