In a continued push to shed its “economy car” image, Hyundai Motor is planning to launch a new in-house tuning division like AMG of Mercedes-Benz and BMW Motorsport as early as next year, industry sources told The Korea Herald.

“Hyundai officials had several meetings recently with those at global premium tuning brands, including Germany’s Brabus, for possible cooperation. The carmaker is seeking to benchmark them,” said a source on condition of anonymity.

Other than German carmakers, Hyundai’s Japanese rivals such as Toyota (Toyota Racing Development) and Nissan (Nismo) have their own performance arms and support motorsports with an aim of boosting engine technology.

In contrast, Hyundai has maintained a low profile in the field, especially on its home turf where souped-up cars are still frequent targets of police intervention and public scorn. Its auto parts affiliate Hyundai Mobis, however, operates a separate tuning brand called Tuix.

Hyundai’s latest move to launch its own tuning brand comes after the government in August announced a new plan to boost the nation’s long-stagnant tuning market by easing a host of related regulations in phases over the coming years.

Under the plan, the government aims to elevate the market size from the current 500 billion won ($470 million) to 4 trillion won by 2020.

Currently, Hyundai is fine-tuning its timing for the new launch and services considering that the industry is full of small and medium-sized manufacturers that have long suffered from sluggish sales.

“It would be a dilemma for Hyundai,” said another industry watcher. “The government wants the biggest carmaker to play some kind of role in boosting the tuning industry, while the company could face harsh public criticism for expanding into a business for smaller vendors.”

“Amid the so-called shared-growth sentiment across industries, Hyundai is more likely to target the high-end market,” he added.

In the process of going premium, one of the role-model brands Hyundai is seeking is Brabus, a German luxury automotive tuner specialized in turning Mercedes-Benz cars, including AMG models, into road rockets.

In 2006, the company, through its separate subsidiary Car Research & Development, had produced 500 special edition cars for the Hyundai Tucson and 300 for the Ssangyong Rexton. During the 2010 Paris motor show, it also teamed up with Hyundai to roll out the sportier i20 hatch.

By Lee Ji-yoon (jylee@heraldcorp.com)