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Is There Room in the Luxury Market for Hyundai?

steverstever Viva Las CrucesPosts: 41,601
edited February 12 in General
Would you buy a luxury version of a Hyundai?

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Minivan fan. Feel free to message or email me - stever@edmunds.com.

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Comments

  • gagricegagrice San DiegoPosts: 29,091
    If they offered the Veracruz with a diesel engine it would get my attention. I was going to look at one and they were sold out. I think the Motor Trend face off with the RX350 was a brilliant move on Hyundai's part. Why not go after the top seller in the class?

    I also think the Azera from the outside is better looking than the competition. I will check them out when they get a Veracruz in for a test drive.
  • drfilldrfill Posts: 2,484
    I'll make this work, but your not helping me.

    Now I have to repost the start. :confuse:

    DrFill
  • drfilldrfill Posts: 2,484
    Hyundai ain't in Lexus' class?!? :surprise:

    They need to pony up some cash, and step into the major leagues.

    They obviously don't want anything to do with Lexus.

    Can they handle Acura? Infiniti? :confuse:

    DrFill
  • steverstever Viva Las CrucesPosts: 41,601
    Ok, we know you aren't in the market for a Hyundai.

    Anyone else care to comment on whether they'll darken the door of a Hyundai dealership?

    Moderator
    Minivan fan. Feel free to message or email me - stever@edmunds.com.

  • joe97joe97 Posts: 2,248
    There is room but one with no margin for error. Hyundai has to do it right out of the gate or don't do anything.

    That said, I have my eye on the RWD luxury sedan. Saw the near production concept at NYIAS up close and in person. I will defn. be having a tough look next year when it debuts.

    Steve, maybe add the Azera to the list?
  • joe97joe97 Posts: 2,248
    The latest I am hearing, the Veracruz diesel should be the first Hyundai in the US with the diesel option, sometimes in 2009 I think.
  • gagricegagrice San DiegoPosts: 29,091
    I don't think they are ready for a separate dealer network. The expense would be too great. I think letting the public know you can get a luxury car without luxury pricing is very appealing. I know my cousin buys top of the line Camry over the same ES350 only because she is extremely tight. For her there is not enough difference to justify the premium.

    Whether folks buy the Veracruz for its luxury will be determined by the buyers. It is a lot of CUV for the buck.
  • joe97joe97 Posts: 2,248
    Luxury Brand Name
    Dealer Network
    Strategy and Logistics (umbrella for many sub-items)
    And most importantly:

    Product Portfolio

    I think the Veracruz should shift over, the RWD sedan and coupe obviously, with another sporty coupe slotting in the current spot of Tiburon. Also, the production of Portico concept and the more luxurious version of the RWD sedan (LWB).

    I wouldn't mind seeing the brand name called Genesis :)
  • andre1969andre1969 Posts: 22,106
    how ready Hyundai is to enter the luxury market, but I have to admit that the Azera's pretty nice. Heck, even in its cheapest form, with the velour interior, it looks like they definitely put some effort into it.
  • mpuzachmpuzach Posts: 635
    ...Hyundai could very well become a force to be reckoned with in the luxury market. Though I don't think there's been any info released on the interior yet, what we do know includes:

    V8 power with "well over 300 hp".
    Rear wheel drive.
    0 - 60 in "well under 6 seconds".
    Exterior styling with more than a hint of the current BMW 7-series.
    As proven by the current Santa Fe, Azera, and Veracruz, a company with plenty of determination to out-class the class leaders.

    As a life-long "car guy" (actually, I'm probably more of a "car snob"), until very recently you'd have had a better chance of seeing me fly to the moon than owning a Hyundai. That changed after my first test drive of a 2007 Santa Fe. I'm now the proud owner of a 2007 Santa Fe Limited AWD. It's an outstanding SUV and I couldn't be happier with it. If Hyundai produces the luxury Genesis (which seems to be a virtually sure thing), I'll be first in line to check it out. In fact, I'll go so far as to say that I'll take a close look at it not even though it's a Hyundai but because it's a Hyundai.
  • gagricegagrice San DiegoPosts: 29,091
    Do you think that Hyundai can ramp up production fast enough to supply another network of dealers? If they cannot build enough Sonata 4 cylinders and are selling out on Veracruz it looks to me like they need more production facilities.
  • iluvmysephia1iluvmysephia1 Posts: 5,713
    that Lexus is merely smoke and mirrors and Mercedes is ultra-snobbery at its best...that Hyundai and their new rear-wheel drive Genesis sedan, Veracruz diesel variants and et all, will prevail.

    It's hard for me to look past the great value Kia and Hyundai bring to the marketplace, and I'm not really a large car or luxury car fanatic...but the new Genesis RWD smacks of reality for mass conversions. No, beyond just handing out flowers at the airports...this will continue to attract the masses to the Hyundai brand. DrFill...you have been a source of extreme entertainment the past several months. Your loyalty is kind of...ummm...scary. No, I don't want any Toyota flowers, fill-ster.

    2011 Kia Soul Sport 5-speed

  • lemkolemko Posts: 15,198
    ...did go into the luxury class, they need to come up with another marque like Toyota did with Lexus. I doubt many people would motor up to the front door of the country club in a plush new Hyundai.

    I like the Kia Amanti just because it is so bizzare! Who else would build a Buick LeSabre with a Mercedes E-Class front end with a Chrysler grille? Trouble is, seeing the cheap-looking KIA oval on the steering wheel kind of reminds you you're in a poseur luxury car. It's kind of like walking out of a store with a new Armani suit only to look back and see Wal~Mart on the building and closely looking at the suit's label to see it's a "Freddie Armani."
  • gagricegagrice San DiegoPosts: 29,091
    US Americans are status conscious for sure. I think adding a luxury line may be counterproductive for Hyundai. The cost of the added dealer network will only raise the price and not the quality of the vehicles. Maybe in 10 years when they have a dealer network that is able to handle two lines. Right now Hyundai is in stores with other brands. My local Hyundai dealer is also the VW dealer which is an add-on to a very large Ford dealer.

    I think giving people more for their money and that great warranty without the added $2000 at closing is a big plus.

    Hyundai needs to add more production in the USA, expand current dealer network & maintain good QC. Customer satisfaction is riding high for Hyundai. They need to keep that momentum going and do not worry about appealing to the Country Club crowd. They are a very small part of the buying public. I think the Veracruz will appeal to the very large soccer mom population that cannot afford the over priced nameplates.
  • bumpybumpy Posts: 4,435
    Right now Hyundai is in stores with other brands.

    The Hyundai dealerships I've seen are stand-alone facilities, though I don't doubt there are some multi-brand sites still around.
  • gagricegagrice San DiegoPosts: 29,091
    It looks like I have 7 Hyundai dealers within 30 miles of my home. Five stand alone and two combo dealers. That should be enough. There are only 6 Honda dealers and 7 Nissan dealers in the same area.
  • joe97joe97 Posts: 2,248
    Do you think that Hyundai can ramp up production fast enough to supply another network of dealers?

    Great question. Exactly why I think Hyundai has to do everything right (almost perfect) coming out of the gate (or don't do anything). In other words, they have to almost predict the number of orders (buyers) and the lead time. Preparation is the key.

    Now regarding the question whether a luxury brand should be established? Hyundai has two routes to take (obviously), continue within its Hyundai brand, and divert outward to a new brand

    For luxury brand:

    Status conscious symbol
    Past history and brand perception

    For Hyundai brand:

    Brand recognition, since the luxury will be starting out zero (good or bad). It will be up to Hyundai to build up like the Japanese three did. It won't be easy but it can be done.
  • fintailfintail Posts: 34,186
    VW tried luxury an fell flat on their face - and their entrant was not a horrible car, just wearing the wrong badge.

    If a lux buyer won't seriously consider a German made luxobarge wearing a "VW" in a circle", why will he consider a Korean made unit wearing a swoopy "H" in an oval? That emblem will damn it, no matter how good the car is, itself.

    Hyundai is 50 years off having legitimate lux chances. They might be able to get up into Lexus ES land, but not into REAL lux land.
  • gagricegagrice San DiegoPosts: 29,091
    I don't see them trying to venture into the "S" or "LS" market, as VW tried to do. They are going after the money making "ES" and "RX", both re-badged Toyotas. Even the "E" class Mercedes would be a stretch. The difference these days in content is not what it was 20 years ago. I think one of the biggest selling points is the warranty. Buying a car today no matter what the brand, you need a warranty way into the future. Unless you dump it in 3-5 years. It used to cost $800 for a transmission rebuild. Today a Honda transmission is 5 grand.
  • joe97joe97 Posts: 2,248
    The problem VW faced was the company tried to sell a $60K+ (base price) car, an amazing car nonetheless - the Hyundai entry will start less than 30K. Based on current demographic of the Azera & Veracruz, I don't think it will be a stretch to say Hyundai will enjoy the same success the Azera and the Veracruz have had so far.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,668
    I don't see any luxury SUV with a diesel engine. That's simply not going to work in the $60,000 class. A diesel is a work engine, not a luxury engine IMO. The two concepts defeat each other. People spending money on luxury don't want to economize (the whole idea is to SPLURGE) and they certainly don't want association with Ford pickups or VW GTIs.

    I also don't see the Hyundai name on a luxury vehicle. As someone mentioned, VW found out that doesn't work. Perhaps Hyundai could carry into the $40,000 range, maybe run with Acura, but that's about it.

    The point really isn't whether Hyundai could BUILD a very competitive luxury car or SUV, the point is whether their brand image would support it. So my opinion is yes to the first--they could build a credible luxury car/SUV and no, they Hyundai name cannot support a price tag over $40,000 -- $45,000 more or less.

    There are no Honda luxury cars, no Toyota luxury cars, no Chevrolet luxury cars....so Hyundai needs a new name.

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  • gagricegagrice San DiegoPosts: 29,091
    I believe if you check into the Mercedes E320 CDI, ML320 CDI and GL320 CDI they are VERY popular and not discounted as much as the other non diesel models. All in the $50k to $70k range. I really don't like the looks of the ML or GL but may be persuaded by the diesel engine. I don't think I am alone in this.

    PS
    I want luxury, economy and to do my part to save on fossil fuel. Diesel is the only option. I am looking for 30 MPG on the highway in a luxury SUV with alternate fuel. Got any other ideas.
  • docrwdocrw Posts: 94
    Are you serious, diesel is only for work engines? Mercedes has a fantastic turbo diesel in the E320, ML320 and soon to be GL320. It is smooth and refined and delivers a ton of torque. Soon Audi will also be putting a diesel into the Q7 and some sedans. Diesel engines are not just for big trucks anymore and with the Bluetec standards with lower emissions and clean diesel fuel there is relatively little downside and tremendous upside with fuel economy and no real loss in power. So go tell the people spending 50-60K on a Mercedes E320 that they are missing the point in spending that much money.
  • fintailfintail Posts: 34,186
    I can agree with Hyundai meeting with acceptable success in that part of the market. I would believe it.

    Maybe the "luxury" term is being overused here. These are cars that are midrange, with a little poshness. Real luxury in a new car today does not start at 30K.
  • bumpybumpy Posts: 4,435
    Maybe we should call it "near luxury"? The big difference between the Phaeton and whatever Hyundai calls the BH is that there was a huge leap from a Passat to a Phaeton, while the V6 BH will sit just above the Azera, and the V8 BH will sit just above that (and the VI will presumably sit just above that).
  • mpuzachmpuzach Posts: 635
    1. Would the market support a Hyundai-badged luxury vehicle?

    2. Would the market support a new luxury brand positioned under the Hyundai umbrella (ala Acura, Infiniti, Lexus)?

    IMO there's little if any doubt that a luxury (or "near-luxury") car such as the upcoming Genesis will be successful. I'm betting that demand will be such that it will be tough to get one for the first year of production, especially the V8 version.

    As for the addition of another brand, it would be a huge undertaking that would cost boatloads of $$$. To do it properly would require a new dealer network and an unsurpassed level of execution at all levels. With the enormous investment that would be required, I don't see it happening.
  • jcwsbltdjcwsbltd Posts: 167
    Well, if you consider what used to constitute a Luxury car, you'd be right - but if you consider what features are available today, it's questionable.The difference between $30 grand and $40 grand isn't so great anymore. $50 grand used to be the price of a smmall house - now you would have to have cars priced at $200,000 equivalent.

    Datsun changed to Nissan for a better perception. Toyota did well with lexus out of the gate. Infiniti didn't do so well until they got rid of the boring designs and got serious about competing.

    Back to the original question - what constitutes Luxury? If it is higher levels of construction, engineering, safety, comfort, convenience features and toys, then all todays modern cars could compete. But they wouldn't have the Cachet or Image that Merecdes, Jaguar, BMW , Volvo, Saab, Cadillac, Lincoln used to have. These brands are no longer so far out in front of the pack.(Jaguar and Saab have already gone the way of the Dodo, Cadillac kinda successfully revamped it's image). They were the brands considered the most expensive, sexiest, quietest, safest, most reliable and well built up to 100K miles - not any more.

    I remember seeing my first BMW in the early 70's and they looked horrible - weird rounded corner little things, with sparse interiors - "you paid how much for that?". They evolved into the cars they are today, just as Hyundai is evolving.

    If Hyundai was to re-brand and create a new image, then IMHO they have already shown they can compete with quality of build and design. If they continue to consistently win awards, then they will almost surely want to upgrade their vehicles- It's the way of Marketing spin and getting to the top of the food chain that counts in the financial world. As it stands now, They have more to gain while the others have more to lose. In any event, it ain't gonna happen soon - maybe 5 years?
  • jaymagicjaymagic Posts: 309
    Just did a Hyundai survey on a name for the "Genesis" model. My first choice was Geneva (Genesis was NOT an option). Others were Epsilon, Talus, Isis, and Zeta.

    As a VERY happy Azera owner, yes I would more than consider a Genesis in a couple of years.
  • gagricegagrice San DiegoPosts: 29,091
    I just went a sat in the Veracruz Limited. It has better rear leg room than the Grand Cherokee Limited & Acura MDX. The interior looked as good as the Acura MDX. It was not up to the ML350 or the GL450 level. It looks as good as the RX350. I have not sat in the new RX so do not want to comment on the comfort of the seats or interior. Both the ML & GL are much more plush, as you would expect for the premium.

    The Veracruz Limited with the Ultimate package had a window sticker price of $36k. It suffers from the same thing I found in the new MDX and Caddy SRX, rather hard uncomfortable seats. The 3rd row was roomier than most 7 passenger SUVs. Still just for kids.

    Just as a side note. The salesman at the VW/Hyundai dealership, told me he sells 3 Hyundais to every VW. The lot was filled with VWs of every model. One row of Hyundais. They just got this Veracruz Limited prepped this morning. I could live with it if it was a diesel. I am still leaning toward the ML or GL diesel. I took the Grand Cherokee Limited with diesel off my list after trying to get comfortable in the back seat. Unless the driver is a real short person you have very little leg room in the back seat.
  • carbuyer11carbuyer11 Posts: 114
    Once again, this post proves a point I made a while back- Hyundai is getting the attention of more affluent prospective buyers. Acura? Mercedes? Hyundai must be doing something right.
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