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The Value Proposition of Luxury Brands

13

Comments

  • j2jj2j Posts: 147
    edited October 2010
    "The Century can compete with Maybach? Where? Among rabid Japanese nationalists? The Maybach is priced pretty much in Rolls territory...does the Toyota compete there too, really?"

    ****
    I didn't bring up the Century to debate how it holds up against the Maybach, but rather to show that one can't simply go by nameplate in considering what is a luxury vehicle (let's try to say on topic, shall we?).

    The Lexus LS460 is generally considered a luxury sedan and a competitor to the S Class, 7 Series and A8.

    Otoh, the flagship of the Toyota lineup is not the LS460, but rather the Toyota Century - so one can't simply dismiss the Century as not being a luxury sedan simply b/c it is branded a Toyota (get the point?).

    And yeah, considering that the Century hasn't changed much over the decades, I'm sure the Maybach is the better car; but the Century, nonetheless, is a more luxurious sedan than the LS460.

    The Century is mostly handcrafted w/ a 48 valve V12 engine and amenities like powered side window curtains.

    The Century Majesty goes even further w/ the luxury and has things like marble runningboard and costs about $500K.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    Well that might be Dubai's idea of luxury, but not America's.

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  • j2jj2j Posts: 147
    So according to you, a Lexus 430 is "luxury", but the near-identical Toyota Celsior is not (even tho, the Celsior came w/ more amenities than the USDM LS430).

    OK - makes sense to me.
  • j2jj2j Posts: 147
    "I think Hyundai tested the waters with it's luxury models. As they see that they can compete, they'll establish a luxury channel. Don't know if they'll do the same with Kia."

    *****

    Kia has no plans for a luxury channel (there is no point since the RWD platform and V8 powerplant they would use comes from Hyundai).

    Kia is just going to bring over the Cadenza/K7 (large, upscale FWD sedan) to compete w/ the Maxima, Taurus, Avalon, Impala and Azera; but they do have a smaller, RWD sedan in the works which is going to be their sports sedan.
  • j2jj2j Posts: 147
    edited October 2010
    "I think Kia is on Death Watch in the USA. I know, most people don't agree with me, but that's what I think. In Asia of course, different story."

    ****

    OK - now you lost any credibility w/ that statement.

    Kia is not only one of the fastest growing brands in the US, it is already the 8th best-selling brand (not counting truck-based GMC) and has a 3.1% share of the US automarket.

    The Kia Sorento is a huge success (beating the Honda Pilot in YTD sales) and the Soul dominates its segment; the Forte/Koup and new Sportage also sell pretty well.

    But the new Optima will surpass all of that and do somewhere btwn 12-15K units monthly.

    And I don't quite understand all this talk about the US and EU being "mature" markets and hence Hyundai/Kia won't have as much growth opportunities.

    H/K will probably overtake Honda/Acura in US sales in 2012; they have already overtaken both Honda and Toyota in Canada and Europe.
  • j2jj2j Posts: 147
    "Does the JDM accept the Celsior as a luxury car more than a high value car? That's a good part of the answer."

    ****

    Yeah, the JDM is totally OK w/ the Japanese royal family riding in the "budget"/high value Century.

    The JDM accepts the Celsior, as well as the Crown Series and the Nissan President, Cima, etc. as being in the luxury segment.

    Just as Europeans don't see BMW or Mercedes being nearly a luxury brand as Americans do.
  • j2jj2j Posts: 147
    edited October 2010
    "Journalists don't get to decide what is a luxury car, nor to forums hosts. Buyers do, ultimately, along with the public's perception of the buyer and his/her decisions. "Successful" or "fool"?

    So we'll see who pays $60K for a Hyundai and if the "luxury" label really sticks, or is dismissed by public perception."

    ****

    Well, considering that buyers are purchasing more Genesis sedans than the Lexus GS, Infiniti M and Audi A6 - I guess that means the latter 3 aren't "luxury."

    Also, considering that the Maybach has bombed in the US (and pretty much every other market), I guess that means the Maybach isn't luxury as well.

    ****

    "The LS400 was an instant luxury car, not in spite of its lower price, but because the Mercedes was so grossly overpriced.

    Here again, the general public didn't vote the Benz OUT of the luxury market, but voted the Lexus IN. The LS400 was an impressive debut and nobody said '$35K for a Toyota??'"


    ****

    Nice spin job.

    And oh, there were many comments at the time the LS400 launched about the Lexus being a Toyota; the only thing that got them to overlook it was the ridiculously low MSRP.

    Also, I guess that means the LS460 isn't a luxury sedan in Europe due to its poor sales in relation to its competition (selling about as well as the Phaeton).

    Otoh, I guess the LS460 is more luxury than the Audi A8 in the US, since it handily outsells the A8.
  • fintailfintail Posts: 33,686
    edited October 2010
    The Century is luxury no doubt, but somehow without the prestige. Nobody outside of Japan would recognize it, and likely most people there have never seen one. More like an overdone curiosity, a homebuilt version of a Mansory Rolls or something. It might be more luxurious than a LS, but is it a better car?

    I doubt the Dubai set would care for it, too old,
  • fintailfintail Posts: 33,686
    edited October 2010
    Lexus dumped the LS way under cost no doubt - price shot up almost immediately after the US market embraced it, no coincidence.

    To be fair, the GS has never sold well, and the Genesis undercuts the Audi especially by tens of thousands of dollars. Hard to call it an apples to applies comparison.

    The US market doesn't define luxury - no market alone defines it, and JDM is probably the least relevant of the developed world. The Germans still run the show on a global basis in the high priced realm, and I don't see this changing anytime soon - hell, sales continue to climb for the highline brands.

    You can spend a day in a posh area of London or Paris or Berlin or Zurich and not see a LS...yet there's a new style LS in the garage of my fairly ordinary apartment building. It's a tough one to embrace outside of NA.

    I think what this all comes down to is that luxury has a definite subjective component, both in the eyes of the owner and the person walking by.
  • lemkolemko Posts: 15,162
    A Century can compete with a Maybach? I might be one of Buick's ultimate fans, but even I wouldn't make that claim! :P

    image
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  • lemkolemko Posts: 15,162
    Oh, you meant this Century?

    image

    Kind of looks like somebody crossed a W116 Mercedes with my 1989 Cadillac Brougham.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    Toyota Century -- That might be luxury to the early Russian mafia, who were used to riding around in surplus army tanks for a long time, but this car would be laughed out of Europe and America I think.

    KIA --Kia has a number of big problems related to the USA market. For one, the resale value of their cars is dismal, and that certainly doesn't go unnoticed by consumers; two, their unions are notoriously belligerent, and the company is beset annually by crippling strikes---this suggests future interruptions in inventory in the US, a situation that few franchised dealers will tolerate; third, Kia competes with its parent company Hyundai--takes sales away from them, in other words; fourth, Kia doesn't have enough USA manufacturing infrastructure, and even with good sales, shipping cars from Korea is going to get more and more expensive.

    Remember, Renault outsold VW in the USA for a while, too, but the product wasn't good enough, parts and service were marginal.

    Anyway, we'll see. Sure I could be wrong, but to say KIA has no problems is I think way too pollyanna a view of their situation.

    HYUNDAI EQUUS --- they have some very clever marketing ideas for this car, such as a pretty good entry-level price for a very well-equipped car; free iPad to help you contact the dealer, etc.; courtesy shuttle to your home; free loaner; 4-seat chauffeur model available.

    Downside? The Hyundai badge; rather blah styling; nothing special in engine performance.

    True, cheaper than the big BMWs and Audis, but they'll blow you away.

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  • corvettecorvette United StatesPosts: 4,108
    The rumor is that they're working on a better engine for the Equus. Of course, that's kind of a way for Hyundai to shoot themselves in the foot (don't buy our new Equus because there's a better one coming out in a year or two). VW did the same thing when they introduced the 2005 Jetta--the only engine available was the uninspiring, underpowered, and uneconomical 2.5 liter five-banger.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    That engine issue definitely needs to be addressed. They're using the Genesis engine. How would you like a 3 series BMW engine in your 7 series BMW? Probably not much.

    KIA --- there was a hot shot foreign car company in the 1980s that in one year became the 3rd largest selling European car in the USA market, behind BMW and Mercedes---it was called the YUGO.

    If Hyundai's plan would be to a) build a new Kia plant in the USA and b) drop the Accent and Elantra and not build a substitute, thereby giving that low end market to Kia and c) move their entire product line upscale, starting with Sonata on up----well then I might change my mind about Kia's future in the USA.

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  • berriberri Posts: 4,174
    The Germans still run the show on a global basis in the high priced realm, and I don't see this changing anytime soon

    I think what this all comes down to is that luxury has a definite subjective component, both in the eyes of the owner and the person walking by.

    The Germans' make some nice vehicles, although not always the most reliable. However, don't you think bias and stereotyping enter into it? In the old days Caddy was aspired to, but during the short Kennedy family and Camelot era their affinity toward Lincoln's had to help the new 61/62 Continental sales surge. Nowadays, I think Americans feel German's are the best automotive engineers, Asians are copycats and Americans are incompetent. Not necessarily true, but what the heck? The Chinese are getting into German cars now because they are status symbols in the West ... and so it goes.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    Well there might be bias and stereotyping going on NOW but Americans got those biases originally from some very valid data. One only need take a spin in a 1989 Mercedes SL and a 1989 Cadillac Allante to have the whole thing laid out before you---or a 560SEL vs. any big American car of the same year. It's pretty shocking to compare. Now, it's still there--the difference---but it's much more subtle.

    Yep, I agree. The Germans define luxury to the world, the others just follow along.

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  • andre1969andre1969 Posts: 21,954
    a Hyundai Genesis sedan out on the streets this afternoon. Well, actually, in the parking lot at CVS. At first, I didn't even pay attention to it. It was gray, and intially I just thought it was one of those Bangled-up BMW 5-series. But then when I went into the store, and walked in front of it, the grille caught my eye...that's when I noticed...that ain't no BMW!
  • fintailfintail Posts: 33,686
    And the funny thing is, the SL platform was 17 years old then! Heck, the W126 was 6 years old when the 560 hit these shores, and it still blew everyone away.

    Regarding the stereotyping, sure it's true, but where there's smoke, there's fire.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    The new Cadillacs are pretty nice. They've come a long, long way to shed their image of vulgarity--another stereotype they had to shake off, thanks to fake landau bars and steer horns, etc. Man, Cadillac has had to carry some very heavy karma. It doesn't seem fair for one marque to bear all that bad ju-ju.

    Of course, Hyundai shook off its bad ju-ju pretty much. So it can be done.

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  • fintailfintail Posts: 33,686
    It can be done, but at the same time, that doesn't mean a maker can built something with the styling (and likely driving dynamics) of the Equus and expect it to be embraced on par with S/7/a8/LS and so on. I think sometimes a maker overestimates their rebirth - see Caddy XLR.
  • hpmctorquehpmctorque Posts: 4,201
    edited October 2010
    Brands don't remain static. Genesis, and even more so Equus, are in their infancy. I think we should wait until the second generation to judge whether they'll remain a low cost knockkoff, or become worthy competitors to the established luxury brands.

    Whether Hyundai's RWD premium models remain part of the Hyundai brand, or are spun off into a separate luxury brand, as Infiniti has done, they'll have to overcome the heritage and first mover advantage of the German brands. While these are significant headwinds, I think it's too early to count the Koreans out.

    I've wondered whether Hyundai's subconscious aim may be to settle some old scores by beating the Japanese brands.
  • iluvmysephia1iluvmysephia1 Posts: 5,694
    edited October 2010
    question mark! Heck, the South Koreans are eating the lunches of many a carmaker now. I frankly don't know why the Germans are even narily in the fight to sell compacts, much less luxury cars right now.

    If I wanted a luxury car right now I'd either buy a midsize Suzuki Kizashi (winning awards left and right for being a driver's midsize car-look it up if you don't believe me) or a Genesis sedan from Hyundai. Not a German.

    I'd buy a Toyota Boat...oh...I mean Avalon before I'd buy any German luxo car. They're over-rated and overpriced and over-hyped. Kind of like Lady Gaga.

    No, I don't know if she's overpriced. That is a bit of a stretch to assume that, eh?

    2008 Mitsubishi Lancer GTS

  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    If the Kizashi wants to be a "luxury" car then we need a new word to describe a Mercedes S Class and similar cars, in the same way that if we call a 20 story building a "skyscraper" the what do we call larger buildings? I mean, is Tony Danza really "famous"? :P

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  • steverstever YooperlandPosts: 40,436
    edited October 2010
    I think a lot of the problem is that no one agrees on the definition of luxury, or whether it can apply to a car or must it apply to the whole brand.

    A lot of luxury features a decade or two ago are now standard equipment which makes it all a bit of a moving target.

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,796
    edited October 2010
    Well it's like the old joke----if some unemployed laborer gets inspired, cleans himself up, buys new clothes and starts working as a shoe store manager, we admire him---but if a former CEO gets a job doing the same thing, we take pity on him.

    So yeah, for a Hyundai, the Equus is a luxury product, but for a Mercedes, that same car would be a down-market product.

    So one's view of "luxury" depends on from where one is viewing it.

    Just labeling something doesn't make it so.

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  • steverstever YooperlandPosts: 40,436
    edited October 2010
    but for a Mercedes, that same car would be a down-market product.

    Like their taxis, A Class, B Class, "executive" cars, Sprinters, smart cars, lorries, etc?

    For all I know, Tiffany may sell refrigerator magnets too. ;)

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  • fintailfintail Posts: 33,686
    edited October 2010
    Kizashi, a luxury car? A mostly FWD car with mass market VW-esque styling? With all due respect....puh-leeze :P

    Here's something for you to do. Go out to a local dealer and drive the luxury market leaders - LS, S, 7, A8. You don't even have to drive a new one. You can find 5 year old examples of any of these for 30K, or 10 year old examples for no more than 15K. Go drive one for an hour, put it through some tests, and get back to us.

    Germans rule the luxury roost, both on this continent and on this planet. In other markets, smaller German cars also find plenty of buyers, and even here people have no problems buying what could be the greatest new car gamble, a VW.
  • fintailfintail Posts: 33,686
    The thing about the lower line cars is that they don't pretend to be anything but what they are.
  • steverstever YooperlandPosts: 40,436
    And does the Equus need to pretend to be something other than it is?

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  • fintailfintail Posts: 33,686
    Yes, over time there is evolution, but I think fanboys or nationalists get a little ahead of themselves, especially lately. Judging by some stuff that has been posted on this forum, the German and Japanese highline models might as well stop production now. I wouldn't count the Koreans out - especially if H can nail down large car design and suspension tuning... but I find it hard to automatically look at something like the Equus as the new LS instead of a new Phaeton. Saying "wait a year for the better engine" is pretty much a handicap, too.
This discussion has been closed.