By Chris Woodyard, USA TODAY
LA JOLLA, Calif. — A funny thing has been happening at Hyundai.
The brand known for cheap cars has quietly inched up its sticker prices closer to those of competitors. The cars are still cheaper, but not by as much — and the South Korean automaker is selling more vehicles than ever at those prices.
"The consumer perception is that Hyundai is a value play, but in reality, it's really getting up to parity with Toyota and Honda," said George Peterson of consultants AutoPacific.
The successful price-creep also is proof that more shoppers now put Hyundai on the same quality plane as its Japanese rivals.
"People are thinking about Hyundai in a different way," says Hyundai Motor America CEO John Krafcik as he wheeled past ocean vistas near San Diego showing off the brand's new flagship midsize sedan, the 2011 Sonata.
Over a 12-year period Hyundia's U.S. market share steadily crept up from 0.6% to 3% in 2008. The automaker's share of sales took a great leap forward last year to 4.2%, Autodata says.
That's still about half the U.S. market share of Nissan, the smallest of the Big 6 sales heavyweights. But it reflects double-digit sales growth last year, while the Big 6 —General Motors, Ford, Chrysler, Toyota, Honda and Nissan — all saw sales fall.
Hyundai's gains have come through a powerful one-two punch of better, more stylish cars and smart marketing maneuvers.
The new Sonata is aimed at truly breaking through into the ranks of those big brands. The sedan is bigger, gets better fuel economy and weighs less than its rivals, such as Honda Accord and Toyota Camry. And it's still priced less than the others, just not as much as in the past.
The 2011 Sonata, just in dealer showrooms now, has a new chrome grille and styling cues aimed at setting it apart from the more conservative Camry, Accord, Chevrolet Malibu and Ford Fusion.
The sedan is getting Hyundai's biggest model launch yet, with $160 million being spent on ads, 25% more than the launch of the previous-generation 2006 Sonata. The effort was bolstered by two Super Bowl ads last month and will include commercials in Sunday's Academy Awards show.
The sixth-generation Sonata is an inch longer than the model it replaces, yet is 130 pounds lighter. Because of engine technology advances, Hyundai offers it with a 198-horsepower four-cylinder engine that gets 22 miles per gallon in the city, 35 mpg on the highway — and has dropped the V-6 option. A turbocharged version of the four and a hybrid are due later this year.
Sonata starts at $19,195 and comes in fully loaded at $27,395 — slightly below, but squarely in the neighborhood of, Camry and Accord.
Hyundai hasn't completely shaken its discount image, says Alexander Edwards, president of consultant Strategic Vision, nor has it shaken buyer doubts about quality that it earned in years past.
Quality has much improved, including high marks for most of its models in the latest Consumer Reports magazine reliability survey. But Edwards says buyers still depend on Hyundai's 10-year, 100,000-mile warranty.
And Hyundai isn't without missteps. Just last week, Hyundai stopped the sale of Sonata for a day and will recall the 1,300 or so already sold to fix a faulty front door latch. While Toyota, with its quality reputation under attack, might seem vulnerable to inroads now, Ford Motor is making the biggest market-share gains, both Edwards and Peterson say.
Still, Hyundai executives are convinced they are scoring more sales with shoppers who compare their vehicles head-to-head against the competition. Says Krafcik, who worked previously at both Toyota and Ford: "Many would have never chosen Hyundai. Now, we're winning the vast majority."
