Hyundai sticks to premium pricing in US with new Santa Fe

The 2024 Hyundai Santa Fe (Hyundai Motor Group)

Hyundai Motor continues to implement a premium pricing strategy emphasizing brand power and quality in global markets, as the automaker unveiled the pricing for the all-new 2024 Santa Fe sport utility vehicle which is substantially more costly than both its predecessors and South Korean counterparts.

The US market will see an increase in the sticker price of all 2024 Santa Fe trims, ranging from an additional $2,250 to as much as $5,200, in comparison to the 2023 model, according to Hyundai Motor America last Thursday.

The difference is even more stark when compared to the pricing in Korea, the automaker's home market. The 2024 Santa Fe Calligraphy trim with a 2.5-liter turbocharged gasoline engine and all-wheel drive is offered in Korea at 45.69 million won ($34,300). This is about $14,000 less than the US equivalent, priced at $48,300. The SUV launched in Korea last August.

The price variation extends to the Santa Fe 1.6 Hybrid model as well, which is priced at 50.36 million won in Korea, or around $10,000 below the US market price.

Such a large price gap bucks the longstanding trend of Hyundai charging higher prices in their home market. Historically, Hyundai had to depend on price competitiveness in the global market to contend with numerous rivals and overcome initial hurdles in brand recognition.

"With the Santa Fe ranking as our second highest-selling recreational vehicle in the US market, trailing only behind the Tucson, we have aligned its pricing to reflect its product quality and the enhanced brand recognition,” said a spokesperson from Hyundai Motor Group.

The 2024 Santa Fe features comprehensive enhancements, including a more striking design with an expansive front grille, a robust turbocharged engine standard in all variants, the addition of a third-row seating option, and a revamped interior featuring a 12.3-inch touchscreen display.

Its pricing now closely aligns with that of the Kia Telluride, a larger, three-row SUV that has found substantial success in the US, ranking as the third most popular SUV last year.

The revision in pricing strategy is not limited to the 2024 Santa Fe but is seen in other recent models in Hyundai's portfolio. In the US, the most high-end trims for the latest Palisade and Kona models are positioned at price points that are approximately $12,000 and $7,500 higher, respectively, than their Korean counterparts.

Hyundai-Kia has managed to retain its status as the third-largest automaker worldwide in terms of sales volume for two consecutive years since 2022. Last year, the conglomerate achieved a landmark double-digit profit margin of 10.2 percent and recorded a 12.1 percent increase in sales within the US market.

“Hyundai-Kia navigated through the pricing challenges posed by the US Inflation Reduction Act for their EV lineup and still managed to rake in impressive profits in 2023. It's clear there are many drivers of their success, but I have to say it goes to show just how much pulling power their brand's got now,” said Kim Sung-rae, an automotive analyst at Hanwha Investment & Securities.

In the US market, the 2024 Santa Fe 2.5T model goes on sale in March 2024, with the Hybrid model coming in spring.

By Moon Joon-hyun(mjh@heraldcorp.com)