Future Luxury Hyundai

You read that right. Hyundai is planning a sedan that's bigger and more upmarket than its new Azera, the XG350 replacement, with rear drive and choices of six-cylinder and V-8 power. Whispers out of Korea suggest the car could appear before the end of the decade. Hyundai also reportedly is working on a coupe version of the car as well. With rear drive and a V-8, the sport coupe isn't a replacement for the Tiburon. If the Tiburon is replaced--and it might not be--the new model would appear about 2009.

One more piece of this puzzle is Hyundai-owned Kia, which could get its own car based on the new platform. If it does, it'll be a sedan only, with no coupe to compete with Hyundai's. Based on the brand values Hyundai has placed upon the two so far, the Kia sedan would be the more youthful, somewhat cheaper of the three models and perhaps might be tuned to play BMW against Hyundai's Mercedes.

Of course, this new rear-drive platform also will revive rumors that Hyundai Motors is looking at a new Lexus-style luxury division. No matter how it's badged, we expect it to hit the U.S. market within four years with the Korean automaker's usual value-pricing strategy, in this case, a fully loaded E-Class and CLK competitor for a base C-Class price.

It's not the Germans who should be worried most, though, but GM--its 2008 rear-drive Buick and Pontiac GTO models are likely to be stickered somewhere in the low $30s and will probably be caught in the crossfire. But will customers buy into the notion of expensive Korean cars? We'll see.