Hyundai counts on car design to boost sales

Hyundai Motor Co. broke into the U.S. market in 1986 with a $4,995 compact car, the Excel. Now the automaker wants customers to buy its models for their looks.

After boosting its U.S. market share to a record this year, Hyundai aims to build on the gains with more stylish designs. The new focus on looks, kicking off with the 2011 Sonata sedan and revamped Tucson crossover, is also aimed at helping South Korea's biggest carmaker command prices on par with larger Toyota Motor Corp. and Honda Motor Co.

"The basic idea is a car that looks like a premium car, but not at a premium price," Phil Zak, Hyundai's head of U.S. design, said in an interview. "We're looking to pull people out of Camrys and Accords and give them something different."

Seoul-based Hyundai has bucked an industrywide slump this year with a 6.2 percent U.S. sales gain through November, as a weaker won enabled the company to boost marketing spending while a stronger yen hurt its Japanese rivals. The Korean carmaker still lags behind Toyota and Honda in terms of brand value, according to analysts.

"The establishment of brand equity and identity that can differentiate it from Japanese makers is a key task ahead for Hyundai," said Chung Sung Yop, a Seoul-based analyst at Daiwa Securities Group Inc.

Market Share

Hyundai's U.S. market share this year has risen to 4.3 percent through November from 3 percent in 2008, with the help of marketing programs, enhanced distribution channels and improved quality, said Chung, who rates Hyundai "outperform" with a 12-month share-price forecast of 142,000 won.

That's still less than one-third of Toyota's 16.8 percent, the second-biggest U.S. market share after General Motors Co., and Honda's 11 percent.

To narrow the gap, Hyundai began working on a design concept it calls "fluidic sculpture" three and a half years ago. The theme is to hint at speed and the looks of expensive European models.