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car review

The Hyundai Equus went on sale in South Korea early this year.

Company officials are still coy about it, but there's no doubt that Hyundai will begin selling its top of the line luxury car - the Equus - some time next year across North America.

Yes, the company that came to Canada selling the awful Pony in 1984 at 6,400 bucks a copy will soon market a car that will run north of 60,000 dollars.

The Equus is along the lines of the Hyundai Genesis, only larger, with the same 4.6-litre, 368-horsepower V8 connected to a six-speed automatic. It has lots of leather and wood and even a television for back-seat passengers. It has been on sale in South Korea since early this year and was clearly designed with the American market in mind.

John Krafcik runs Hyundai Motor America from its head office near Los Angeles.

Vaughan: The Genesis was a pretty big surprise with Hyundai moving into the luxury category. Now there's the Equus, which is bigger and more expensive still. What are you going to do with the Equus in North America? Is it going to be the beginning of a separate luxury channel in the same way that Toyota has Lexus?

Krafcik: Genesis has been a huge success for us.

Honestly, it surprised us. We wondered if we could sell a $30,000 Hyundai in the United States. But more than half of the Genesis that have been sold so far have been $40,000 Hyundais fully loaded. That's where the demand has been.

So that surprised us and gave us a little bit of confidence to consider the Equus. We're very, very close to a final decision on this car, which is already on sale in the Korean market.

The Equus is more like a Lexus LS or a BMW 7-Series while the Genesis has more of a sporting or performance flavour.

The Equus is a more comfortable car, a larger car.

But that comes back to the question of whether you need a separate channel? Do you need a Lexus-like dealer to sell luxury cars?

Well, Genesis says we can make it happen within the Hyundai brand and cast a wonderful halo on all the other products. That's really worked for us.

How far can we take that? I think it remains to be seen.

Are we studying a luxury channel? Absolutely, we're studying. We haven't made a decision yet but maybe some day.

What are the dealers telling you because you've had 100 Equus running around the States showing the dealers? They'd like the higher margins.

The dealers have been very positive about the car, which is really interesting, because if you go back two or three years, our dealers were uncertain about Genesis.

They were afraid we were moving from Accent and Elantra and our value roots. Since then we've shown them we're expanding but we still have a focus on vehicles like Accent and Elantra.

All right, you're going luxury, but you've also talked a lot about going green.

We have a great new strategy - we call it Hyundai Blue Drive. Blue is the new Green.

Part of it is our very first hybrid vehicle. It's finally coming - yes, it's true, we're a little bit late.

We're launching our first hybrid with third-generation battery technology. Right now, every hybrid on the road in North America has nickel metal hydride batteries. You've heard of lithium ion batteries in vehicles like the Tesla - the same exact batteries that are in your laptop. We're jumping to third-generation technology - what we call lithium polymer batteries and these will be in our very first hybrid, which is coming next year.

It's a flexible battery - that's the polymer part of lithium polymer. It runs very, very cool. It would only take 72 of these, which are about the size of a large envelope, to drive the Sonata.

Here's something that's always puzzled me. What's your relationship with Kia? Hyundai owns Kia and you share R&D and you share engineering with Kia, but you fight each other to the death in the marketplace.

We do, yeah.

Well, Chevrolet and Pontiac did that and we know how that story ends.

I think if you go way back with General Motors when the divisions were more independent - I think those were the golden days of GM.

Things kind of got all messed up when suddenly each brand was managed by a brand manager and everything else was all the same underneath the skin.

We're more like the older GM. We're completely independent and autonomous in North America from the sales and marketing point of view.

Yeah, we share some parts, powertrains and such, but if you look at our lineup, they're really completely different.

I think we're doing a much, much better job now of making the brands distinct.

Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 2 p.m. on CTV.

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