And the bigwigs spent ten years building brand equity with cheap, basic transportation. And lo, the Japanese automakers headed upmarket, ceding entry level business to the Koreans. And the Seoul sales train smiled for it was good. And then came the Genesis, and Hyundai’s new day morphed in the minds of its creators from budget luxo-fighter to an opportunity for sub-brand confusion and ADD.

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The Blue Oval Boyz are launching the curiously named, Hyundai-trumping Ford Advantage Program. The deal—which runs from today to June 1—offers new car buyers 12 months of “payment protection” (leg breakers need not apply) up to $700 per month, zero percent financing and, of all things, a donation to a local charity. Strange times when it’s considered an “advantage” to know you won’t lose your car for a year if you lose your job. Hang on; I’m looking for the fine print now . . . nope, can’t find it. Will update ASAP.

Quick: name a Hyundai sports sedan. Can’t do it, can you? If there’s ever been one, I’m not aware of it. No, the late unlamented Hyundai Elantra GT doesn’t count. Even with a red “GT” on the rump, the suspension tuning decidedly prioritized ride quality over handling. Perhaps “GT” means “standard leather” in Korean? But let’s not count Hyundai out just yet; there’s no Sonata GT in the lineup at the moment. Meanwhile, for 2009, the Korean manufacturer has quietly dipped a toe into the sport sedan pool by adding a “sport suspension” to the Sonata SE. This site has deemed the Sonata—in GLS form—“a great car for people who don’t care all that much about cars.” Do firmer springs and dampers transform the midsize sedan into “a great car for people who do care about cars?”

In comparison to the Genesis sedan, the Genesis Coupe has appeared on dealer lots like a Stealth bomber sliding into Whiteman. Either Hyundai thinks their new two-door makes such a strong impression it doesn’t need a huge marketing campaign to jump-start the public imagination, or they blew their wad with the sedan. Whatever Hyundai’s intentions, the Genesis Coupe speaks for itself, surpassing its current competitors in the pony car market. (2010 Ford Mustang test to follow.) If you’re looking for a rear-wheel drive, high powered sporty car at recession friendly pricing, exodus forms on the right.

For the past few car shows, Hyundai has been displaying mock-ups of a future Tuscon light-SUV. Boring enough one might say, except that the concepts have been so swoopy/gorgeous that even my SUV-hating girlfriend gets wanna-have pangs for what she calls the J-Lomobile. Here in Geneva, Hyundai is showing what they now call the ix-onic, a lower-case technical whiz kid. It has a 1.6L turbo gasoline engine, 170 hp, but emmissions of only 149 g CO₂, a DSG transmission and all kinds of other technical gobbledygookery. We can expect it for 2010 with few changes to the highly atractive concept except for the usual smaller wheels and lower chrome content. But what about the name? A Hyundai spokeman said all future 4WD models will use the ix-nomenclature, as in “ix-1”, “ix-2”, etc. That’s a relief—I was almost expecting something along the line of an upcoming Hyundai ix-otic, Hyundai er-otic and Hyundai ex-tatic (the latter being a sports car, of course). Tu-tonic plays with words, I know . . . .

If you’re looking for uplifting, feel-good news about the auto biz, this is about as good as it gets. Subaru sales edged up about 1 percent compared to February of last year, carried by a staggering 101 percent increase in Forester sales. Subaru sold 5,978 of the recently redesigned, Impreza-based utes last month. All other models were down month-on-month, with Tribeca (−58 percent) and Outback (−37 percent) faring worst. Hyundai sales were down compared to last February, but only by 1.5 percent, a hell of an accomplishment in this market. Genesis is chugging along with 1,263 leaving dealer lots in February, but bread-and-butter Sonata sales are at about half of 2008 levels. Elantra sales are up by over 2k units though. SUV sales are taking an wholly unsurprising beating, while the Entourage sold nearly 2,500 units. Kia (via PRNewswire) is up a whopping .4 percent, with Sedona, Sorento and Amanti all seeing increases over last February. First-ever Kia Soul sales hit only 34 as the newest Kia hits dealerships.

Clifton writes:

“My friend at [Hyundai Motor Company] was as excited about having me sample the new Genesis Coupe as I was to slide behind the wheel. I finished my official Hyundai factory tour, stepped off the bus (within the plant confines) and there she was: the Hyundai Genesis Coupe. Bewildered Korean tourists gawked as I was formally introduced to South Korea’s next big thing. They hope.

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There’s a certain raw satisfaction to be had in seeing a man go utterly, completely mad in public, particularly when there’s a plateful of free bacon in front of you and an attentive server standing behind you, ready to swap your newly emptied bacon-plate for a full one at the slightest, Sotheby’s-private-bidder-esque, wave of a hand. This happy spectacle was available to all and sundry at the media breakfast that opened the 2009 Chicago Auto Show yesterday morning, courtesy of Hyundai’s American CEO, John Krafcik.

“Let me start my short comments today with a pair of quotes from two great Americans,” Krafcik opened. “Thomas Jefferson said that a government big enough to give you everything you want, is strong enough to take everything you have . . .

“For example, it’s difficult to put a finger on exactly when China moved from a purely Communist country, to an energetic proponent of a new form of capitalism.” The statement led one colleague to wonder aloud whether that “new form” included the “energetic” harvesting of organs from members of the Falun Gong. Another one observed, “If this guy’s lucky, nobody back home cares enough to translate this speech into Korean.”

The irony that the Chinese government is strong enough to take everything that South Korea has seemed utterly lost on Hyundai’s senior American executive.

But before anybody could stop chewing their bacon long enough to ponder Krafcik’s iffy grasp of the geopolitical scene, he dropped all remaining un-dropped jaws by stating that “change” called for “a more equitable distribution of income.”

The steady susurrus of surreptitious cell-phone use and side conversations came to a crashing halt as various members of the Midwest Automotive Media Association, the folks who traditionally host the Chicago morning breakfast, started nervously catching each other’s eye, wondering exactly who made the decision to invite Chairman Mao to speak at this event.

Having swiftly disposed of the American way of life in just a few opening paragraphs, Krafcik got into the real meat of his speech: a two-fisted attack on the “industry” and its “greed.”

“Turning our industry around will require some revolutionary thinking,” he said. And to prove it he went to declare that Hyundai would meet a fleet average of 35 miles per gallon by 2015. “A bold position perhaps, but we were honestly surprised to be alone amongst all automakers in taking a position like this one. Going forward, we’d love to have some company here.”

This “bold position” was revealed, in post-speech questioning, to be anything but: Hyundai will have a “Sonata-class hybrid” in 2010. But Krafcik was quick to assure the audience that the fleet average would come from “downsizing engine packages, taking weight out of the cars, a thousand little things.”

In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.

[It’s worth noting that this “revolutionary thinking” actually dates back to when Lee Iacocca unveiled the Plymouth Horizon “Miser,” a car which had been so ruthlessly optimized towards 50mpg on the highway that they had, apparently, left the final “y” off the nameplate.]

With this not-entirely-revolutionary disclosure, Krafcik returned to his Timberlakian mission of bringing Trotsky back by suggesting “a more inclusive form of capitalism” in which executive salaries would be limited to a certain multiplier of average pay. It was not immediately clear as to whether this form of capitalism would be exactly like that exciting new Chinese form to which he had referred earlier, but if I were a member of an obscure religious sect in America right now, I’d be counting my kidneys.

Last but not least, it was time for some bragging.

Hyundai has managed to increase both market share and sales in the past few months. Lest anyone think that this was a simple matter of newly impoverished consumers buying cheaper vehicles, Krafcik took some time to lavishly praise the “Hyundai Assurance” program.

“The Assurance Program did not require government support. But it has delivered benefits to all stakeholders, and to society . . . This is how private enterprise should work. Somewhere, Thomas Jefferson is smiling.”

And why shouldn’t he smile? After all, Hyundai is on the way to becoming an American company! “The lines between domestic and import will become increasingly blurred. We will exercise more sensitivity, more discipline, and be more inclusive, in all aspects of our business.”

Having unintentionally closed an insensitive and undisciplined speech by calling for sensitivity and discipline, Mr. Krafcik allowed the media to finish their bacon and stumble, blinking, into the light of McCormick’s million-plus-square-foot arena, wondering what the hell they’d just heard.

I reckon Mr. Krafcik chose the wrong Thomas Jefferson quote. The one that comes to my mind: “He who knows best knows how little he knows.”

People who did buy cars last month were clearly shopping for value, and Hyundai/Kia rode its rep to sales increases in a month of market contraction. Hyundai was the biggest winner in the US market last month, with overall sales rising 14 percent, to a sales total of 24,512 units. Hyundai’s press release highlights strengths in the firm’s eastern sales district (reportedly up 20 percent over January 2008), and positive reactions to its Assurance program. On the product front, Sonata sales lead the way, up 85 percent in a month when Accord/Camry/Malibu competitors dropped 30 percent or more. And with BMW selling only 23 7-series in January, Hyundai’s Genesis was a recession-level hit with 1,056 sales. Santa Fe was up 35 percent, and at 5,024 units sold it was Hyundai’s second best-selling nameplate. Kia sales were up 3.5 percent, with Rio (+60 percent), Optima (+75 percent) and Rondo (+90 percent) making up for decreases elsewhere.

The Hyundai Sonata is a great car for people who don’t care all that much about cars. That’s not a slam. I have a friend who considers his car a device for moving bicycles around. Another buddy would drive a large teapot if it promised a cheap commute. These are bright, successful guys for whom “driving dynamics” are as valuable as GPS on a squirrel (hunters excluded). These motorists deserve a decent ride. Once again, Hyundai’s stepped up to the pump with an automobile that’s so generic you expect to find it in the paper towel section of your local supermarket.

2008 was supposed to be a banner year for Hyundai. The company predicted a huge sales jump and promised a new flagship. And then 2008 actually happened. Sales were, well, you can guess that one. From a sales and PR point-of-view, the new, V8-powered Genesis was well received. From a sales perspective, not to much. Still, as one Hyundai Marketing VP put it, “if [consumers] aren’t forced to reconsider us, they won’t.” To paraphrase Elvis, perhaps we ought to give Hyundai a little more time. Meanwhile, the comparison between Hyundai and a young Toyota seem to have faded from view. In fact, you could make the case that Hyundai is more GM than Toyota. Well, if not you, me.

Perhaps one of the biggest similarities between GM and Hyundai: a disfunctional relationship with its organized labor. Actually, the comparison leaves the GM-UAW relationship looking downright touchy-feely. In 2006 alone, Hyundai lost 118,293 vehicles worth $1.75b due to strikes and walkouts alone. When it refused to pay year-end bonuses of 1.5 times the monthly pay (even though the production goal wasn’t met… due to strikes and walkouts) workers (wait for it) walked out.

Hyundai caved a few days later, with bosses calling the bonus as a “fresh deal” and “an opportunity to clearly recognize that appropriate remuneration can only come after workers achieve the goals.” But Hyundai management is well-trained by now. Their notoriously militant union has held a strike every year since 1987. Except for 1994. Maybe NAFTA scared them for a year. In any case, if the brand that was launched by Rodney King wants to join the Toyotas of the world, something will have to be done about its labor relations.

But Hyundai management doesn’t have much moral high ground from which to fight. The antics of President Chung Mong-koo would make Blagojevich blush. Mong-koo was convicted on $100m embezzlement and bribery charges–and then freed on the grounds that he could “contribute to the company and the national economy one last time.” Although his son Chung Eui-sun has left the top spot at Kia, he’s still considered the dynastic heir apparent to his headline-grabbing father.

Kia was supposed to provide an opportunity for Eui-sun to prove himself. That hasn’t panned out. High steel prices in Asia and union turbulence have played merry hell with Kia’s thin profit margins. “Kia’s profitability this year and its longer-term competitiveness depend largely on labor flexibility,” says Stephen Ahn of Woori Investments. His theory: it will be better for Eui-sun to keep his hands clean. With another Hyundai strike looming and some serious coming to terms with economic reality ahead, he may be right.

So Eui-sun will stay on as head of Kia’s overseas operations, busying himself with successful Slovakia operations and a giant factory under construction near West Point, Georgia. While basking in the glow of Kia’s new products, from the current Euro Cee’ds to their forthcoming cousins, the Soul, Forte/Spectra and YN. But even on the product front, more symptoms of “Big  Company Syndrome” loom for the Hyundai conglomerate.

If the Genesis got people thinking differently about Hyundai, a super-Genesis will bring in the few remaining skeptics, right? That seems to be the thinking behind the Equus, the troublingly named, packed-with-technology, S-Class fighter. The car will clock-in with a reported price tag north of $95k. Luckily for Koreans, recent rumors of a stateside debut for the Equus means grey-market imports a la Genesis can begin.  

Even at a lower price, the Equus reeks of “Big Company Syndrome.” Whereas the Genesis adds least some enthusiast rear wheel-drive panache to the Hyundai brand, the Equus is a staid limousine. Its owner (Chung Mong-koo?) will likely never stray from the back seat, as he or she is shuttled from payoff to “political fundraiser.” More importantly, a $96k car in the midst of an economic downturn doesn’t say anything positive about the Hyundai brand that the Genesis doesn’t. A budget S-Class is one thing, a Hyundai Maybach is another. And that’s before you start on the name.

In reality, Hyundai is letting Kia take over as the purveyors of cheap and cheerful. And as the “junior brand” picks up its game with the Forte and Soul, Hyundai is chasing the American brands with SUVs, Crossovers and RWD offerings. Product overlap between the two brands, a coming labor confrontation and untimely upmarket ambitions by Hyundai may be enough to take some shine off the Hyundai-Kia juggernaut. Moody’s is eyeing a credit rating cut for Hyundai-Kia, as a weak Won kept things from getting too nasty in 2008. This year will be tougher still.