SEOUL: Hyundai, the automaker, is hoping to attract a more affluent audience by pursuing a tie-up with Hermès, the French luxury group, which has designed the interiors for some of its latest vehicles.

Three new models in Hyundai's Equus luxury range feature leather interiors from Hermès. Wonhong Cho, Hyundai's chief marketing officer, told Reuters: "The model is aimed at improving brand image."

Although Hyundai is the fifth-largest player in the global automotive category by sales, it is generally perceived as a comparatively low-cost brand, and thus struggles to compete with premium players.

Competition in the South Korean auto industry is also rising, both as local manufacturers like Kia attempt to improve their product offerings, and as foreign brands like Audi, BMW and Mercedes gain ground.

As a result of free-trade deals struck with the US and European Union, the market share of imported cars has, in fact, risen ten-fold in South Korea during the last decade, to some 10.1% overall.

Hyundai embarked on a similar programme via a partnership with Prada, the Italian luxury label, in 2011, producing a limited-edition, high-end variant of its Genesis sedan.

Although only a third of the available 1,200 cars were ultimately sold, Cho suggested this scheme "significantly" enhanced the status of Hyundai's brand.

Elsewhere, Toyota, the Japanese car manufacturer, has made in-roads in the luxury sector by rolling out its separate Lexus marque, with Honda and Nissan adopting a similar business model.

Cho argued the alliance with Hermès was just "one of our new attempts" to crack the premium segment, but ruled out using a separate brand. "We have concluded that we can do it with only Hyundai brand," he said.

Jack Trout, head Trout & Partners, the consultancy, was more sceptical. "You cannot offer upmarket prestige with a downmarket brand no matter how fancy you make it," he said. "The Hyundai brand does not have a prestige perception."

Data sourced from Reuters; additional content by Warc staff