How does the brand name "Equus" strike you? Do you like it? By 2009, you may see a new automobile marquee by that name driving around the United States. The Equus is Hyundai’s flagship domestic Korean luxury sedan. Introduced in 1999, it is Korea’s #1 luxury car, followed by BMW, Mercedes, and Lexus. Rumor has it that Hyundai may introduce the Equus to the U.S. automobile market soon under the Hyundai nameplate. Edmunds.com is reporting that Hyundai of America is testing a prototype of the 2008 Equus that could represent the first Hyundai introduced under a new luxury brand. If Hyundai does introduce a new luxury brand to the U.S., the name will most likely be the "Equus," which I think is a fine name. The name evokes both style and balance. In its drive to become one of the world’s top five automobile manufacturers, Hyundai must introduce a global luxury brand and should consider developing a line of trucks under the Kia brand (Hyundai owns Kia, and Kia produces small trucks for the domestic Korean market). Hyundai has improved immeasurably in recent years and now ranks up with Honda and Toyota in J.D. Powers’ quality rankings. Sources tell me that this is partly because Hyundai relied heavily on Toyota to improve its quality. However, Hyundai has rightfully emerged as an automaker to watch. In the 1990’s, the name Hyundai evinced cringes by wary American consumers; now, more and more Americans are discovering that Korean automobiles are affordable, well-built, and stylish.
The Korean domestic automobile market is very interesting. Five companies dominate the market: 1) Hyundai Motors; 2) Kia Motors (part of the Hyundai Group); 3) GM-Daewoo (a division of General Motors); 4) Samsung Motors (a division of RenaultNissan Motors); and 5) Ssangyong Motors (a division of China’s Shanghai Automotive Industry Corporation, or SAIC). In my opinion, a country of 44 million such as South Korea cannot sustain five domestic automakers. During the 1997 Asian Financial Crisis, every Korean automaker felt the impact of the crisis, and the four smaller companies sought to avoid liquidation by selling out to other manufacturers. Hyundai scooped up Kia, and foreign automakers purchased the other three. The crisis allowed foreign companies entree into a relatively closed Korean automobile market. For example, General Motors’ products do not sell well in Korea, but GM-Daewoo has been fairly successful since GM reluctantly acquired Daewoo in 2002. Interestingly, the company’s Shanghai GM partner in China, SAIC, is a major competitor in South Korea because SAIC owns Ssangyong Motors.
I expect the Koreans to make three advances into the U.S. automobile market in the next decade. First, Hyundai will introduce the Equus as its luxury brand. Second, General Motors will leverage GM-Daewoo to source Korean components to its U.S. brands. For example, a Daewoo platform will used in a Chevrolet compact car. Daewoo has a presence in Europe, but GM will not introduce Daewoo to the U.S. market. Third, SAIC could introduce its first car, an SUV such as the Ssangyong Rexton, to the U.S. market under the Ssangyong Motors nameplate. Ssangyong is a better-known name than SAIC, which markets cars under different nameplates than "SAIC." Korea is already a major source of automobile components to the U.S. and owns a 5% share of the U.S. auto market, so it is logical that the Koreans will continue to bolster their presence in the U.S.
From the "Things that Make You Go Hmm…" Department: I turned on CNN briefly tonight and heard the anchor speaking with a British accent. It occurred to me that whenever I watch CNN International, I listen to newscasters broadcast with British accents. However, whenever I listen to CNN in the U.S., the newscasters speak with either British or American accents. Why doesn’t CNN International, including CNN Europe, offer broadcasts with newscasters who speak with American accents? I may be wrong. If you are outside the U.S. and watch CNN, let me know if you’ve ever heard an American accent. I think CNN may have a bit of a bias towards British English. There is no reason why CNN International newscasters much speak British English.