Hyundai Rolls Out First Hybrid Car

By SUNGHA PARK

GAPYEONG, South Korea – Hyundai Motor Co. on Wednesday began selling its first hybrid car, a version of its Avante compact sedan that runs on a combination of liquid petroleum gas and a battery, in South Korea and said it would roll out gas-battery hybrid models in other countries next year.
The company said the new car is the first hybrid to be powered by LPG. Many South Korean taxis and buses run on LPG, which burns cleaner and is less corrosive than ordinary gasoline, and Hyundai has been successful with LPG-powered versions of its midsize Sonata sedan in the country, which has a sizable infrastructure of filling stations for the fuel.

Hyundai will produce the Avante hybrid in three trim levels, with the entry-level vehicle expected to sell for 20.5 million won, or about $16,200, after the effects of a tax break. That's about 8.5 million won more than the entry-level, gas-powered Avante, but the gap is reduced by other tax exemptions. (Outside South Korea, Hyundai uses the name Elantra for its compact sedan.)
LPG is priced at about half the level of ordinary gasoline in South Korea, which means that the payback from fuel savings with Hyundai's Avante Hybrid is faster than seen with gas-hybrid cars that have gained popularity in the U.S. and elsewhere.
Under a formula assuming 20,000 kilometers (12, 428 miles) in annual driving, Hyundai estimates the new car would produce fuel savings of about 1.35 million won each year, based on current prices at the pump.
Rim Joung-hun, a marketing manager, said Hyundai is studying other countries where LPG vehicles are common but it doesn't plan to export the vehicle for now. The company plans to offer a gas-battery hybrid version of the Sonata in North America late next year, before selling it in South Korea, Mr. Rim said.
Like other hybrid vehicles, the Avante is equipped with a dashboard indicator to notify a driver when the car is performing at peak fuel efficiency.
South Korea's government late last year introduced a tax benefit to encourage purchases of hybrid cars. The incentive, which took effect last week, gives buyers an exemption on taxes of as much as 3.1 million won. The tax break expires at the end of 2012.
Even with the tax break, South Korean government officials are forecasting slow sales of hybrid vehicles, with just 30,000 expected to be on the road by 2012, in a country where about 1.1 million new vehicles are purchased annually. Japanese manufacturer Toyota Motor Corp., the leading seller of hybrid vehicles worldwide, hasn't introduced its models in South Korea. Honda Motor Co. offers a hybrid version of its Civic compact in the country.
Hyundai said it aims to sell about 7,500 models of the hybrid Avante in South Korea this year and 15,000 next year. The company is South Korea's biggest car maker and seller with unit sales last year of 571,000 vehicles, about 49% of the overall market. The Avante was its second most-popular vehicle, with unit sales of nearly 88,000.
Write to SungHa Park at sungha.park@wsj.com