"You have to be careful with the word premium": Why Hyundai won't follow Mazda down the rocky path to premium

Hyundai has confirmed its commitment to its mainstream origins, telling CarsGuide it wouldn’t be following arch rival Mazda into the premium world with vehicles like the all-new Tucson.

Its Japanese rival has made a global shift towards becoming a more premium brand, trading off sales volume for more feature-packed, and more expensive, models, in a push to move to what it refers to as "Mazda Premium".

It's a global strategy, though one probably felt most keenly in the USA, where the brand asked its dealers to move their facilities more upmarket, in keeping with other premium brands, and vehicle prices begun to climb accordingly, including the axing of entry-level models.

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The strategy has arguably cost the brand sales, both here and in the USA. The new Mazda3 - formerly one of the country’s best-selling vehicles - has dropped out of Australia’s top 10 list. There have been similar results in the America, leading to Mazda USA CEO Akira Marumoto to concede the price jump was too large.

"The price jump for the entry-level could have been too large — that is something we are reflecting on right now," he said last year.

"For the previous-generation Mazda3, there were entry, core and high-grade models. For the entry, the price was around US$17,000 or US$18,000. We made a conscious decision not to battle in that arena anymore. The new Mazda3 entry level sits around the US$21,000 level. That's where we think the hike was maybe just a little too high."

For its part, Hyundai says it has no intention of walking a premium path with its products, confirming it would remain a core brand and let Genesis take on the luxury segment on its own - a fight that could take some time in Australia.

“You need to be careful with the word premium. We are a core brand, we play in the core segment," said Hyundai's Head of Global Product Management, Lorenz Glaab.

"What is true, however, and has been accelerating over the last couple of years, is the adoption rate of technology. Or, as we put it, the trickle-down rate of technology from higher segments to lower segments, from the premium area down to the core area.

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"This is clearly a trend and this could lead to the impression that the gap between premium and core is not as pronounced as it was 20 years ago."

The sentiment was echoed by Hyundai's Head of Global Design, SangYup Lee, who told media at the unveiling of the new Tucson that the brand would continue to focus on "volume".

"The Hyundai brand, we are a volume brand. But out of the volume brands, we want to create the best value in terms of technology and price. But we have a luxury brand in Genesis."

Local pricing is yet to be confirmed for the new Tucson, so time will tell whether Hyundai in Australia will price its new SUV accordingly.