New Equus makes Chinese debut as Hyundai seeks to increase market share

Gasgoo.com (Shanghai October 16) - In contrast with the lackluster 3.5 percent average growth rate in the domestic automobile market, luxury vehicles have been doing very well in China, with the segment growing at over 40 percent. However, it is mainly European brands, such as Mercedes-Benz, BMW and Audi, which have been reaping most of the rewards.

"Currently, 90 percent of the Chinese luxury car market belongs to Mercedes-Benz, BMW and Audi," the National Business Daily quoted Kim Seonbal, head of sales for Hyundai's Chinese sales company. Japanese and Korean brands Lexus, Infiniti, Hyundai and Acura hold the short end of the stick, jointly holding only 10 percent coverage in the luxury car segment. In response, Hyundai has announced a revolutionary new strategy in order to increase its market share.

With natural disasters this year hindering Japanese enterprises' sales worldwide, Korean manufacturers such as Kia and Hyundai maximized on the event to increase their market coverage, increasing the rate of new models and introducing new aftermarket service policies.

The long wheelbase limousine version of Hyundai's flagship luxury sedan, the Equus, made its official Chinese market debut earlier this week, with a price tag starting at 898,000 yuan ($141,151). At the press conference for the release, Mr. Kim said that the Equus' introduction marks the entry for Korean manufacturers into the German dominated luxury vehicle segment. The Equus will reportedly be targeted at the Mercedes-Benz S-Class, BMW 7 Series and Audi A8.

Due to the lack of market awareness for the Equus, especially compared with its German rivals, Hyundai has decided on a bold new move. According to company officials, the manufacturer will be offering unlimited, five-year service for the long wheelbase Equus in order to make it more competitive. In addition, Hyundai will be offering several sales promotions for the car, with some dealer offering to buy back cars bought new after one year at use at 80 percent their original cost. Hyundai will also replace any cars damaged in an accident if said car's repair costs exceed 30 percent of the car's value, for no additional charge.

Although stated to be aimed at the German manufacturers, the new Equus' appearance will pose a threat to Japanese brands. According to Mr. Kim, the Equus has sold 500 units since its Chinese introduction, while 650 of the Lexus LS460 have been sold. Mr. Kim hopes that with the premiere of the new variant, the Equus' total sales will top 1,000. Because of the strong hold German manufacturers hold on the segment, many in the industry believe that Hyundai will more likely be siphoning sales from its Japanese competitors.

When asked for their response to Hyundai's promotions for the new Equus, Lexus officials said they were not going to make any response, as they were confident in the completeness of their brand's sales network in the country. Lexus will continue its policy of further developing the market for hybrids in China.