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Is There Room in the Luxury Market for Hyundai?

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  • backybacky Twin CitiesPosts: 18,715
    ...has the market really demonstrated that it is ready for even a $30k Hyundai branded product...

    Do you have any idea how many Veracruzes, Azeras, Genesises, and even Entourages that Hyundai has sold for over $30k in the past few years? Any idea at all? No, I didn't think so. How ever many it was, I expect no number would be good enough for you to think that "the market" (translated: captain2) is ready for a $30k Hyundai branded product.
  • j2jj2j Posts: 147
    It also means that the LS400 must have been cross-shopped mostly w/ the C Class and 3 Series and not even the E Class and 5 Series, since it was closer in price to the C and 3.

    "Quite possibly in the same way that some are looking at the Genesis over a G in that it offers a larger car at a similar price."

    ^ So that would imply that the Genesis is a luxury vehicle since you insinuate that the Genesis is a competitor to the G.

    And really, pretty much all LS400 owners would have a conniption if they were told that their Lexus was more a C Class competitor, instead of an S Class competitor.
  • j2jj2j Posts: 147
    this is the first I've heard of this and obviously a coupla steps in the right direction if any 'room' is to be found. Gotta keep those 'luxury' Genesis branded products and customers away from those mere Hyundai products & buyers - that's the kind of thing that works here in the good ole US of A! I actually suggested this early on, in this very forum - somebody listening? Nah, not likely

    Uhh, your point was already MOOT since Hyundai has plans to launch a lux brand in 5-6 years time (which I had already stated a no. of time - I guess you weren't listening).

    Besides, it's not like there hasn't been "mixing" in auto retail sales before.

    Prior to the sale of Aston and Jaguar, the Manhattan Ford dealership sold Astons, Jags, Lincolns and Fords on the same floor, albeit w/ each having their "separate" showroom.

    Not much diff. from what Hyundai is doing w/ the Equus - each Hyundai dealership selling the Equus is required to display the Equus in a separate showroom.

    Anyway, it's not like the 60K-80K+ Corvettes, GT-Rs and Land Cruisers aren't sold alongside the more mundane Chevys, Nissans and Toyotas.
  • j2jj2j Posts: 147
    "you obviously aren't reading my posts and following the herd here in assumming I'm some sort of Hyundai basher. Quite to the contrary actually. Yes the comment that the Sonata could be used as 'entry level' in the same manner as a MB C or 3 series BMW is laughable but it is NOT because it is the Sonata in this case isn't a fine car. It is because it is a Hyundai. The same comment would apply for the Camry, Accord, Fusion or whatever - they, along with the Sonata are ALL mass marketed 'appliances' - something that the BMW 3 is decidedly not - despite being reasonably high volume."

    Give me a break - you totally misread the whole point the other poster was making about the 3 Series.

    And speaking of appliances the fact that the ES does so well, given what the car actually is, is yet another testimony for the importance of brand reputation,. brand recognition and the American consumer's sensitivity to both - and even another illustration why Hyundai will never get there as a 'luxury' brand.

    And yet, the Lexus branded GS (the most closely related to the Genesis), despite the Lexus brand reputation, etc. over the past couple of years has been a sales failure (selling about 500-600 units a month).

    And it appears that the brand new Infiniti M may very well be outsold by the Genesis this year as well.

    And try understanding the distinction btwn luxury brand and product.

    I never stated that Hyundai is or ever will be a "luxury" brand.
  • j2jj2j Posts: 147

    It is Hyundai can make a list like this:

    http://www.autoweek.com/article/20100429/CARNEWS/100429801

    1. BMW $21.82 -- (25)

    2. Toyota $21.77 -- (26)

    3. Honda $14.30 -- (46)

    4. Mercedes $13.74 -- (53)

    5. Porsche $12.02 -- (65)

    6. Nissan $8.61 -- (86)

    7. Ford $7.04 -- *

    8. VW $6.99 -- *

    9. Audi $3.62 -- *

    10. Renault $3.26


    Gee, I can come up w/ brand rankings that say different.

    2009 Interbrand Ranking
    -----------------------
    Automotive Brand Value Change Top 100
    Ranking Brand (US $Bil) Y-o-Y Ranking
    ------- ------- -------- ----- -------
    1 Toyota 31.3 -8% 8
    --- ------- ---- --- ---
    2 M-Benz 23.9 -7% 12
    --- ------- ---- --- ---
    3 BMW 21.7 -7% 15
    --- ------- ---- --- ---
    4 Honda 17.8 -7% 18
    --- ------- ---- --- ---
    5 Ford 7.0 -11% 49
    --- ------- ---- --- ---
    6 VW 6.5 -8% 55
    --- ------- ---- --- ---
    7 Audi 5.0 -7% 65
    --- ------- ---- --- ---
    8 Hyundai 4.6 -5% 69
    --- ------- ---- --- ---
    9 Porsche 4.2 -8% 74
    --- ------- ---- --- ---
    10 Ferrari 3.5 0% 88
    --- ------- ---- --- ---
    11 Lexus 3.15 -12% 96
    --- ------- ---- --- ---

    http://www.tradingmarkets.com/.site/news/Stock%20News/2535746/
  • j2jj2j Posts: 147
    "Since reliability, though, seems to be your primary motivation I would suggest to you two things:
    1) there do remain better choices than (most) Hyundai products in that regard and,
    2) product reliability has historically meant little to those in the market for true luxury cars."


    Talk about speaking from both sides.

    First off, among mainstream brands, there aren't that many better choices w/ regard to reliability.

    And product reliability has been crucial to the success of Lexus in the US.
  • j2jj2j Posts: 147
    "well if that is the case with the BusinessWeek/Interbrand study, then there is no reason why Hyundai shouldn't get their butt in gear and restructure both Hyundai and Kia, so that Kia becomes the mainstream brand to compete with Toyota, Honda, Nissan, GM, and Ford while Hyundai competes with all the other luxury divisions.

    Hyundai then is going to have to get rid of most of their models below the Azera and either downgrade/integrate them into the Kia brand, either by expanding Kia models or getting rid of some all ready existing Kia models and making for instance, the Kia Sonata, Kia Elantra, Kia Tiburon, etc etc! "


    Yeah, getting rid of the Sonata, Santa Fe, Elantra and Tuscon is real smart.

    Again, it's a moot point since Hyundai is planning on launching a lux brand in 5-6 years time.
  • j2jj2j Posts: 147
    "A good portion of what makes a luxury brand is the exclusivity (and price premium) attached to the products so branded."

    Yeah, cuz the Mercedes A and B Classes are so "exclusive", not to mention all the E Class taxis in Europe.
  • j2jj2j Posts: 147
    "Another difference might be design...the Phaeton was/is (as it is still sold in Europe) a smooth Teutonic design, where the Equus is an old and kind of weird KDM design...that might make up for some differential when it comes to market acceptance. Some people did buy Phaetons, just as some will buy Equus."

    While the Equus is a bit too "old style" for my taste - it nonetheless, still looks more aggressive (w/ the horizontally-slatted grill) looks more aggressive/sleek than the snore S Class.

    As for design, the Phaeton's design was a big part for its failure (along w/ its overinflated price-tag).

    The Phaeton had the VW corporate front and rear fascias - few people wanted to drive around in a larger and much more expensive Passat (there's a reason why the Equus looks nothing like the Sonata/Elantra and why the LS looks little like the Camry/Corolla).
  • j2jj2j Posts: 147
    "Given that the $25k Azera has not sold very well, and that even the $35k Gen sedan sales pale in comparison to the sales figures for other (upscale) sedans in its price category, the question remains, in my mind, has the market really demonstrated that it is ready for even a $30k Hyundai branded product - never mind one that is 60????"

    - The Azera was a decent, but hardly an award-winning product like the Genesis sedan (plus, Hyundai didn't market the Azera at all; that'll change w/ the next-gen Azera).

    The Genesis sedan outsold all other import E segment sedans aside from the E Class and 5 Series in 2009; outselling the Lexus GS and Infiniti M by a 2:1 margin. And from the looks of it, the Genesis sedan may very well outsell the new M this year.

    And again, Hyundai isn't planning on big sales for the Equus, which is why they are only planning on an annual alottment of about 2K a year (the 1st year's alottment is already taken; those interested in the Equus get put on the waiting list).

    Hyundai is using the Equus has a "halo" vehicle to get the public used to the idea of a luxury vehicle from Hyundai - thus paving the way for a smoother introduction of its luxury brand (why is there a need to have to keep repeating this?).
  • smarty666smarty666 Posts: 1,503
    I never said they should get rid of those models. If Hyundai launches its own separate luxury division at some future point then they wouldn't have to do anything to those models!
  • lemkolemko Posts: 15,162
    Well, the original LS was priced more in the C-Class range. From a driving dynamics standpoint, I'd say the LS' closest competitor is a Buick Park Avenue. No offense! I love the Park Ave!
  • ergsumergsum Posts: 144
    Interesting. Who would have thought we would see an article like this ten, or even five years ago.

    Hyundai vs BMW
  • captain2captain2 Posts: 3,971
    And yet, the Lexus branded GS (the most closely related to the Genesis), despite the Lexus brand reputation, etc. over the past couple of years has been a sales failure (selling about 500-600 units a month).

    a convenient comparison for you perhaps, but the Gen is not 'closley related' to the GS, the Gen being larger slotted in between that and the LS. Furthermore the GS is Lexus' attempt at a 5 series competitor something that Lexus has come up short on pretty much since the model's inception. A step child of sorts and a faulty comparison IMO. RWD BS not withstanding, the Gen Sedans closest Lexus competitor is the ES, if for no other reason other than price. .
    And anything that is really competing in the upscale sedan category will likely outsell the higher priced luxury sedans, only makes sense.
    Never have denied that the Gen is not a decently luxurious sedan, only that a true luxury sedan must also be luxury branded (and sold) else we all could be driving 'luxury' Grand Marquises and spending even less money than what Hyundai is hgetting for the Gen.
  • captain2captain2 Posts: 3,971
    thus paving the way for a smoother introduction of its luxury brand (why is there a need to have to keep repeating this?)
    which is all, I have ever said, for HYUNDAI to 'find room' in the luxury market, they must establish a luxury brand (why is there a need to keep repeating this?) :P
  • fintailfintail Posts: 33,710
    HILARIOUS article...I know AOL is hard up for dough, but come on :shades:
  • fintailfintail Posts: 33,710
    I don't see anything aggressive about it - it is weirdo and rather garish KDM design, an Azera greenhouse, tall proportions, and you know the "snore" S also has a horizontally slatted grille. I don't look at an Equus and think performance and handling, or anything aggressive.

    The Phaeton didn't flatly fail in every market, you know. It's still in production, still being sold.
  • fintailfintail Posts: 33,710
    edited May 2010
    The LS as usually equipped when new cost around 40K 20 years ago - E-class money. There was no C-class then, and the 190E cost around 30K. Funny how thnigs change and at the same time remain the same - a new base C is still barely over 30K, a base E is in the upper 40s. We have Lexus to thank for that, and Hyundai will probably add to it as well.

    Lexus is the Japanese Buick, replacing Buick for many Americans. I think that market will be where the Equus gets any sales...I don't see any en masse defection from the big Germans.
  • captain2captain2 Posts: 3,971
    yep, as this author even seems to recognize, the sophistication and integration that makes cars like the 535 (and others that truly compete with it ) what they are- does cost some extra $.
  • smarty666smarty666 Posts: 1,503
    I mean this isn't the only reason but I've read many reviews over the years and I think the reason why the GS has not done well for Lexus is that is does not follow or go along with the driving dyanmics that the rest of the Lexus line-up is known for. Many people have commented that it has a harsh/rough ride, is very uncomfortable in the seats, and lacks the refinement the IS, ES, and LS have.

    Since Lexus is known for mushy/soft ride qualities, uber comfort seats/features, etc and refinement, if the GS lacks those Lexus characteristics, it makes sense then that it would not sell well compared to the other Lexus models. Again, I'm not saying these are the only reasons, as I'm sure there are others that just aren't coming to mind right now but it explains a lot.

    It will be interesting to see what Lexus does to the GS with its next redesign!
  • jimbresjimbres Posts: 2,025
    What fin said.

    As a BMW owner & fan of German steel, I'd say that BMW's new offerings - specifically, the latest 5-series - are obviously a response to a resurgent Audi. I don't think that BMW senior management expected Audi to roar back from the dead as decisively as it has.

    In my German-car-loving NYC suburb, I see far more Audis than I did 3 or 4 years ago. As far as I can tell, Audi's gains are at the expense of other German brands.

    I don't think that BMW pays nearly as much attention to any Asian competitor - not even to Infiniti, which some think of as the Japanese BMW.
  • bobadbobad Posts: 1,587
    It's a good article. I think it's fairly accurate and well balanced. Insecure BMW enthusiasts will probably be offended by the comparison. Hyundai owners will say the price difference is a lot wider given Hyundai's large discounts. And what about the failure to mention Hyundai's superior warranty? :blush:
  • backybacky Twin CitiesPosts: 18,715
    which is all, I have ever said, for HYUNDAI to 'find room' in the luxury market, they must establish a luxury brand (why is there a need to keep repeating this?)

    That's a good question: why is there a need for you to keep repeating this? If someone says "The sun rises in the West" hundreds of times, does it make it any more true?

    I think it's indisputable that Hyundai has already carved out ROOM in the luxury market, based on facts such as sales of the Genesis. The point open for discussion is, when will Hyundai (by whatever badge on the trunk lid) be viewed by the majority of buyers as being equal to established luxury brands like MB and Lexus? That is, when will the size of Hyundai's luxury "room" be at least same as that of competitors like those?
  • steverstever Ex Yooper, just arrived in New MexicoPosts: 40,529
    Deal of the Week: Hyundai Special Pricing Through Costco (Edmunds Daily)

    Well, why not? Tiffany was worried about Costco selling diamonds a few years back (CNN).

    The bad news for Hyundai is that "sales of both vehicles have not lived up to expectations, with the Genesis averaging under 2,000 units sold (Sedan and Coupe combined) per month this year and the Veracruz averaging only about 500 deliveries. Just for comparison, BMW has out-sold the Genesis with their 5-Series and the Lexus RX has outsold the Veracruz."

    Moderator
    Need help navigating? stever@edmunds.com - or send a private message by clicking on my name.

  • captain2captain2 Posts: 3,971
    Many people have commented that it has a harsh/rough ride, is very uncomfortable in the seats, and lacks the refinement the IS, ES, and LS have.

    Indeed, this what Toyota and Lexus have both done very well over the years - understanding the American preference for the 'soft' boulevard cruiser. Simply put, what is 'refined' to the American carbuyer is usually a whole lot different than what is for the European. Blame it on those ludricrous spongebob warboats of the past, but the American carbuyer seeks isolation from his driving chores , the European wants involvement.
    Most of your German sedan fanboys will have no use for Lexus products for precisely that reason - even to the pont of sacrificing Lexus' superior reliabilites for the German sedan's better dynamics. There is a fine line, apparently, between a firm controlled ride and one that is too harsh (by American standards). The German sedans, at least to this point, seem to be about the only ones that can find that line. Infinitis, I guess, do come closer to that Germanic feel although even they come up short - just like the GSs, IMO
    It should be easier for Hyundai to try to emulate the Lexus approach as opposed to what the G3 do
  • smarty666smarty666 Posts: 1,503
    Its going to be a very long time backy before anyone will ever consider Hyundai as being equal to MB, Lexus, and BMW. I mean, Audi, Infiniti, and Acura have been around in this country a lot longer than Hyundai and even they are not considered equal and are still working hard/struggling to raise their status and these are established luxury brands. If they are struggling as luxury brands for reputation and prestige that BMW, MB, and Lexus has in this country, its going to take Hyundai a long time, since they are no where even near the level of Audi, Infiniti, or Acura in the luxury regard!
  • captain2captain2 Posts: 3,971
    sales of both vehicles have not lived up to expectations
    and
    BMW has out-sold the Genesis with their 5-Series and the Lexus RX has outsold the Veracruz."
    you have to wonder if it isn't the Hyundai name holding things back, it's not like the Hyundai products don't have significant price advantages. :confuse:
    Here's a vote that says that the sales would be doing better had they established the Genesis name and the Genesis dealer.
  • smarty666smarty666 Posts: 1,503
    edited May 2010
    Very nice assessment and completely agree with you. I like Lexus and they make some of the most comfortable, softness riding products on the market and that in combo with their sloppy handling has never appealed to me to buy there products yet, though you are right, Lexus sales in this country are even higher than that of BMW and MB which shows what the American consumer feels is important. Personally, I like the driving dynamics that BMW, Infiniti, and Audi offer. MB, at least their more common products, are similar to Lexus in driving dynamics, but with a bit more refinement in handling and suspension set-up, but not up to the standard of Infiniti, Audi, and BMW!
  • captain2captain2 Posts: 3,971
    I think it's indisputable that Hyundai has already carved out ROOM in the luxury market, based on facts such as sales of the Genesis
    and I think it is VERY disputable ---- selling a lousy 1500/month in the $40k upscale sedan segment is somewhat insignificant and does not mean that anybody has necessarily accepted the Genesis as a luxury car or Hyundai FTM as a 'player' in the luxury segment.
  • jimbresjimbres Posts: 2,025
    Insecure BMW enthusiasts will probably be offended by the comparison. Hyundai owners will say the price difference is a lot wider given Hyundai's large discounts. And what about the failure to mention Hyundai's superior warranty?

    This not at all insecure BMW owner isn't offended in the least. I just think that the comparison is sort of silly. But that's the beauty of the Internet: it provides an audience for this stuff. You can compare a microwave oven to a miniature poodle, & someone, somewhere will link to your article & call you perspicacious. I love this stuff, dumb as it is, & that's probably why I waste as much time as I do on the Web.

    Length of warranty doesn't matter to the majority of 5-series owners who are out of their leases before the warranties run out. I'm the relatively rare bird who owns my BMW, which will turn 9 next month. (Knock wood - no real problems yet.)

    If I could spend 5 minutes with BMW's CEO, I'd tell him to worry more about the Infiniti; the new Ms are far & away the biggest Asian threats to the 5-series. And whereas the Genesis still can't be had with AWD - IMO, a colossal blunder on Hyundai's part - both the M37 & M56 offer AWD variants. Here in NY, upwards of 90% of the Ms will be sold or leased with AWD.
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