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Wednesday January 9, 2008

South Korea's Hyundai Motor launches Genesis luxury car in foray into high-end market

MYT 8:04:06 AM

SEOUL, South Korea (AP) - Hyundai Motor Co. launched its new rear-wheel drive Genesis luxury sedan Tuesday in a splashy official debut for a car the South Korean company sees as its ticket into the ranks of the world's top-end automakers. 

Hyundai preceded the introduction by showing a promotion film featuring a decidedly James Bond-like actor driving the sleek, road-hugging vehicle. The screen then receded to reveal an orchestra and three South Korean tenors who gave a live performance of the aria "Nessun dorma'' from Puccini's opera "Turandot.'' 

Hyundai Motor said it invested 500 billion won (US$533 million; euro362 million) to develop the Genesis over the past four years, and sees it as a competitor to luxury models such as Daimler AG's Mercedes-Benz E-Class, BMW AG's 5-Series and Toyota Motor Corp.'s Lexus GS. 

The car "symbolizes our determination to enter the highly competitive arena of luxury cars now dominated by the Europeans,'' Hyundai Chairman and CEO Chung Mong-koo said in a statement earlier. "Genesis will consolidate our position as the leader of the Korean auto industry and will pave the way forward for our leap into the global market.'' 

Hyundai said it aims to sell 55,000 of the vehicles this year, 35,000 at home and 20,000 overseas in North America, China and the Middle East. It is targeting Genesis sales of 80,000 in 2009, with 45,000 of that total in foreign markets. 

Hyundai plans to begin U.S. sales in June and in China in August, said company spokesman Jake Jang, who added it would begin running ads for the car in the U.S. around May. 

Stephen Ahn, an auto industry analyst at Woori Investment & Securities Co., said Hyundai is treading the path of Japanese automakers such as Toyota, Nissan Motor Co. and Honda Motor Co. that launched luxury cars to transcend earlier reputations as solid makers of quality vehicles. 

"I think Genesis could be the next catalyst for brand-value growth'' for Hyundai, said Ahn, who predicted the company will sell about 50,000 of the vehicles this year, slightly short of the Hyundai's stated goal. 

Hyundai shares rose 0.9 percent Tuesday to 69,100 won (US$74; euro50). 

The Genesis, which comes in 3.3-liter and 3.8-liter engines with a 4.6-liter versions due out later this year, is Hyundai's first rear-wheel drive vehicle. 

The car is built at a specially constructed facility in Ulsan, an industrial and port city 414 kilometers (257 miles) southeast of Seoul, where Hyundai has its main factory. 

The Genesis sells for between 40.5 million won (US$43,142; euro29,330) and 52.8 million won (US$56,240; euro38,240) in South Korea. 

Depending on engine size and other options, the most expensive Genesis in the U.S. would cost under US$40,000 (euro27,200), said Oles Gadacz, Hyundai's chief global spokesman. 

The company announced last week that its total global vehicle sales this year would increase nearly 20 percent to 3.11 million on expanded overseas production and stronger marketing. 

Hyundai, with affiliate Kia Motors Corp., forms the Hyundai-Kia Automotive Group, the world's sixth-largest automaker. It has ambitions to crack the top five by 2010. Both Hyundai and Kia have aggressively expanded in recent years by building new plants overseas. 

Hyundai has plants in China, India, Turkey and the United States, is building a factory in the Czech Republic, has plans to construct one in Russia and is looking for a site in Brazil. 

Kia has factories in China and Slovakia and is building one in the United States. 

Hyundai Vice Chairman Kim Dong-jin said that as its name suggests, the Genesis is only the beginning for Hyundai. 

"We are going to continue the introduction of premium cars,'' he said. "This is the first product. That's why we named (it) the Genesis.'' 

The launch of the Genesis caps a rough couple of years for Hyundai during which it dealt with a series of costly labor strikes and saw Chung, the company chairman, convicted and sentenced to three years in prison over a slush fund scandal that rocked the automaker. 

An appeals court judge suspended the sentence last year, however, saying the famously hands-on executive was simply too important to South Korea's economy to do time in jail.-AP 

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