Monday, February 20, 2006
Grandeur Korean Middle Class Favorite
One of the topics this blog frequents is Korea's luxury car market. Last year import luxury cars made inroads. To combat reduced market share, Hyundai seeks to maintain its dominance. One dynamic is the desire by middle class families to own luxury sedans. I see upward mobility and conspicuous consumption as markers of modern Korean society. This article notes how Hyundai's luxury Grandeur (Azera in the U.S.) is outselling the Sonata.
The Hyundai Grandeur is taking the place of the Sonata as the middle class'’ favorite car. Since 1994, the Sonata has been Korea'’s bestselling car except in 1998 at the height of Asian fiscal crisis. (That year the Daewoo'’s low cost Matiz briefly took the top spot.)
But since the end of last year, the more expensive Grandeur TG has overtaken the NF Sonata. Since its launch last May, the two cars have been in fierce competition for the monthly market lead, and by the end of the year the winner was clear. In December, 9,967 Grandeurs were sold, 2,303 more than the 7,664 Sonatas the company shifted. It was the same story in January, when 7,916 Grandeurs were sold but only 6,321 Sonatas. Since Grandeur output stabilized in June, the sedan sold on average 7,791 units a month, comfortably overtaking the Sonata'’s 7,171. Yet the former costs W26-38.8 million (US$26,000-38,800), 20 percent more than the W20-32 million ($20,000-26,000) for the latter.
>>>The reason the Sonata was able to achieve such a huge success in the domestic market since 1994 was that it succeeded in creating its own image naturally. The Sonata symbolizes a successful middle-class lifestyle, a researcher with Korea Investment & Securities said. But when per-capita income rose to $16,000, the symbol changed from Sonata to Grandeur.<<<
A researcher with Good Morning Shinhan Securities says if the trend continues, the Grandeur will record sales of more than 100,000 in Korea this year, a 45 percent increase from last year, and steal the bestselling car title.