Hyundai Azera Slides Into Luxury Territory for $37,000

SAN DIEGO ( MainStreet) -- Heated front and rear seats. Dual-zone climate control. Touchscreen navigation -- just a few of the standard features in the 2013 Hyundai Azera.

While Hyundai is not necessarily the first automaker that springs to mind when considering a luxury car purchase, by many accounts the Korean automaker's 2013 Azera is loaded with enough luxury features to make it a viable player in the upscale car market -- comparable to the Lexus ( TM) ES.

But whether the car-buying public realizes the leaps the car has made over the past few years and will pay the increased sticker price remains to be seen, say some automotive industry experts.

"If you took a look at the Azera with no predisposition, you'd think it was a luxury car," says Bengt Halvorson, deputy editor of High Gear Media, a company that specializes in providing information for new car shoppers. "It certainly compares with the Lexus ES in terms of ride and handling and performance."

Azera, one of six sedans offered by the Korean automaker, benefits in its most recent model year not only from more luxury bells and whistles, but also from a completely different architecture -- a more fluid styling and design approach that Hyundai began implementing in 2011 on its Sonata, Halvorson says. It made for a wildly successful relaunch of the Sonata two years ago.

"They put a lot of effort into design, and for first time Hyundai had its own design -- that didn't look derivative from other Japanese cars. It set its own style, and that was really important," Halvorson continues.

That new, very distinct, very stylish approach doubled sales of the Sonata within a year or two, Halvorson says.

Last year that design approach was applied to the Azera. And this year even more features were added.

"The Azera, in previous iterations, was basically a pretty boring, soft riding, traditional car -- quite simply a great bargain. It offered a lot of features for the money viewed in the same segment as a Buick ( GM) -- stodgy but a great deal. You could pick one up for under $30,000 with everything," Halvorson says. "The heated and cooled seats, the heated steering wheel -- those are quickly becoming differentiators. The heated rear seats used to be a feature only the creme de la creme had -- the large expensive luxury cars that you would be chauffeured around in."

The base price of the 2013 Azera is $33,000. Adding a technology package with such things as ventilated front seats, rear and side window sunshades, a panoramic tilt and slide sunroof, xenon headlights and a powerful Infinity stereo brings it to $37,000.

The car manufacturer shies away from labeling the Azera a luxury vehicle, but does say it's designed to be a more upscale model with leather seats, HD radio and navigation system coming standard, a first for the Azera and this car segment.

"I wouldn't go as far as saying it's a luxury car. It's more of a premium offering. It's a great step up from the Sonata," says John Shon, a manager of product planning for Hyundai.

The car, says Shon, is aimed at bridging the gap between the less expensive Hyundai Sonata and the pricier Hyundai Genesis, and in doing so is aimed at a car buyer with increasing amounts of money to spend.

"The Azera is targeted to people who mature and progress through life stages and want to upgrade within five years of purchasing a Sonata, people who have matured in their career and are more affluent," Shon says.

Hyundai's Shon says sales of the Azera have been decent, with an average of 1,000 units selling monthly nationwide.

An even more important indicator of the car's market appeal is its average transaction price, Shon says. It shows what the market is willing to pay for the vehicle at the dealership.

"On average, the discount people are getting is about $1,000," Shon says of the transaction price. "Which indicates this car is very appealing at its price point."

But Halvorson doesn't paint quite as rosy a picture.

"So far sales have been a dud. That's been the rumor in the industry. I went back and looked up sales figures. They're moving really slow," Halvorson says. "Hyundai seems to be running into trouble stacking models too close together. The Azera is sandwiched too closely between the top Sonata and the more expensive Genesis."

The other drawback for the Azera that Halvorson sees has less to do with the Azera itself and more to do with the level of service provided by Hyundai versus other luxury car makers: "When you buy a Lexus ES you get that dealership experience that Hyundai is missing somewhat at the top of its lineup -- that perfect 'We're on top of things, we will shuttle you wherever you need to go or give you a loaner car' type of experience."