Hyundai Palisade ’80 per cent’ locked in for 2020

HYUNDAI Motor Company Australia (HMCA) is on the precipice of confirming availability of the Palisade large SUV, which is now an “80 per cent” chance of assuming flagship responsibilities in its model line-up in the second half of 2020.

Speaking to GoAuto this week at the Venue national media launch in Ocean View, Queensland, HMCA chief executive officer JW Lee said the local division has been working to convince parent company Hyundai Motor Company (HMC) of the Palisade’s viability in the Australian market, which would require right-hand-drive production that currently does not exist.

“Right-hand Palisade costs a lot,” he said. “Normally, when we discuss these types of things with HMC, they say very abruptly, ‘No. Not possible. Not viable’, or something like that. But this time, they said some positives and considered, ‘Maybe we’ll look at these things’.”

Mr Lee did caution that it is not all smooth sailing as “there are several areas we need to resolve, in the technical space, (including) transmissions, engines”, which are holding up the RHD program, although it is inching closer.

“In my view, HMC will allow us to import this Palisade next year – that’s my gut feeling,” he said. “I haven’t received any kind of official letter from HMC … but based on my experience, maybe they are going to us allow us (to sell Palisade) … in the second half of next year.”

GoAuto understands that the Palisade’s optional Htrac all-wheel-drive system is one of the challenges being faced by HMC’s engineers, as the model was originally designed with just left-hand-drive production in mind, meaning some componentry cannot be swapped without extensive re-engineering.

If this roadblock cannot be overcome in a cost-efficient and timely manner, Australian examples of the Palisade will only be offered with front-wheel drive, which will likely limit the model’s volume potential.

The Palisade launched in the United States with a 217kW/355Nm 3.8-litre naturally aspirated V6 petrol engine, but Mr Lee said HMCA would also like to offer a turbo-diesel unit with its version, likely the 2.2-litre four-cylinder found in the one-size-smaller Santa Fe.

“We have explored the gasoline and the diesel – that’s our recommendation, but HMC will decide which one is going to be fitted,” he said.

The Palisade is currently built exclusively in South Korea, where Australian examples will also be imported from if the RHD program gets the green light, according to Mr Lee.

He added that Australia will likely not be the only RHD market for the Palisade, as other ones are set to benefit from HMCA’s push, but it will be the largest.

Mr Lee clarified that Australia’s demand alone is “not strong enough” to establish a RHD business case for the Palisade, although he could not be drawn on an exact sales expectation.

“The cost calculations are yet to be fixed, as far as I know, but how many cars can we sell? I’m not sure – 4000, 5000, 8000, it depends. But if you can sell more than 10,000, great! But if you are only selling 4000 or 3000, it’s very dicey in terms of profitability,” he said.

“Maybe a breaking point is around 4000 or 5000. If you can sell maybe 4000 or 5000 or 6000 (units), maybe it can be justifiable, but less than those numbers (it won’t be).

“As of now, we are not able to guarantee the volume to HMC … but to lead the market in the future, we need these types of bigger SUVs in Australia – that was our strong point to appeal to HMC.”

The Palisade is available with seven or eight seats in the United States and native South Korea, with Mr Lee pushing for the latter in Australia as it will likely be a key point of differentiation against rivals like the hot-selling Toyota Kluger and put further distance between the new model and the Santa Fe, which is 211mm and 136mm shorter in length and wheelbase respectively.