Hyundai split on segment-sharing models

Hyundai has a history of doubling up its models within VFACTS market segments here in Australia, and the importer seems to be divided on the value of that.

The importer's i40 and Sonata are both medium-segment entrants, with the potential to take sales off each other in the local market. It's not without precedent, the i40's original introduction putting paid to the larger i45 in this market. Yet here's Hyundai, once again, having introduced a new i45 (badged Sonata once more), updating the i40 (pictured) to possibly plunder more sales from the larger car in the same segment.

Hyundai Australia COO John Elsworth sees no reason to be concerned. During the launch of the updated i40, Elsworth told motoring.com.au that in the event one car proved more popular than the other, at least Hyundai would be getting the sale – and not seeing it go to another brand.

"The way we've set it up is we've got two sedans – one's diesel, one's petrol. Sonata's petrol... and the i40 also comes with the wagon. This gives us the biggest footprint in that segment; whether it impacts one or the other... doesn't really matter to us, because we'll just match production of one to the other."

It doesn't explain why Hyundai dropped the i45 from its local range well short of the introduction of the new Sonata. To the chagrin of Hyundai Australia staff, who are ramping up sales of the new Sonata, the new model has attracted criticism in the USA for being styled too blandly, relative to its predecessor, the car we knew as the i45. That criticism may be a Godsend in Australia, however, since there's reason to believe the i45 suffered here because its flamboyant styling was not what Australians wanted from their mid-sized Hyundais. The diesel drivetrain availability in the i40 and bad press the i45 received on launch here probably played a part as well.

Despite Elsworth's nonchalance concerning the potential for cannibalisation of sales, there is a cost to running separate parts inventories and marketing efforts for two cars that ostensibly fulfil the same function in the same segment. And there must be some impact on Hyundai's standing in individual segments, where VFACTS measures sales separately for i30 and Elantra, for instance – one basically the hatchback version of the other, a sedan.

Higher up in Hyundai's local product portfolio, overlapping model ranges could have a drastic effect on profitability. The new Genesis, which is priced considerably higher than local cars of similar size, is struggling to sell in anything like comparable numbers. An obvious means of enhancing the appeal of the Genesis would be to bring in a low-specification model – possibly with an engine other than the current 3.8-litre V6 that is the sole offering here. But while VFACTS treats the Genesis as a large car and the Sonata as a mid-size car, the two are much closer in terms of interior space and footprint than the market segmentation indicates.

For the moment it matters little, according to Hyundai Australia's Public Relations General Manager, Bill Thomas, since the importer has no immediate plans to forge ahead with an entry-level Genesis that would absorb the unsated demand for affordable large cars once Commodore, Falcon and Aurion are no longer built here.

"At the moment it's not something we're thinking about; it's not something on the radar," Thomas said, when questioned as to whether the Genesis would move downmarket after 2017.

Thomas agreed that such a move ran the risk of robbing the Sonata to pay the Genesis, where local sales were concerned.

"To an extent, yeah. The Sonata is a pretty big car... you sit in a Sonata and sit in a Genesis – and there isn't a hell of a lot of difference in rear-seat room. But the Genesis has got more of a dynamic appeal to it being rear-wheel drive. It does fit that large-car mould better than Sonata.

"It will be interesting to see what they [Holden] do with Commodore. I guess we can wait and see on that one. But at the moment I'm certain it's not something we're really thinking about planning – in terms of de-speccing the Genesis. We're quite comfortable with the way that car sits at the moment."