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Is There Room in the Luxury Market for Hyundai?

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  • captain2captain2 Posts: 3,971
    I am startled that there are some stating that Hyundai will have to "pay it's dues" before garnering respect. It seems to me that Lexus didn't have to pay dues very long before a lot of eyes were opened.
    you are right about Lexus hiting the ground running and the fact that there was little resistance to the NEW luxury brand BUT a few things to remember:
    1. The LS was THAT good relative to what the Germans were doing at the time
    2. Toyota had such a good name at the time - that the fact that Toyota was making the thing was an ASSET to the new marque
    3. they did establish a new brand to at least partially take care of the carbuyer's often absurd brand consciousness.
    and lastly
    4. those new Lexus dealerships established a new standard for what a 'luxury' dealer should be - in fact reinforcing the Lexus luxury image.

    'Paying their dues' is an interesting comment - but in the case of the Gen, Hyundai has really only addressed 1 of these 4 things that Lexus (and Acura) both did so well 20 years ago.
    Agree with you on Subaru incidentally - a brand with a solid enough rep that they could ride those favorable brand perceptions through the creation of a 'luxury' brand - one that would perhaps play off the all weather' cpapbilities of most of Subaru's products.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,916
    I think Subaru tried to go upscale a bit with the B9 Tribeca and I don't think it ever met sales expectations. Subaru has been leaving their little niche behind a bit, but they still have tons of repeat business by focusing on AWD and versatility, more so than luxury.

    Plus they've increased production quite a bit in Indiana to keep up with demand and may not have the capacity to scale up to another platform without risking a lot. Maybe they could clone a Lexus though, since Toyota owns a good piece of them (16% iirc).
  • backybacky Twin CitiesPosts: 18,618
    Are you saying then that Acura is a good model for Hyundai to follow? A model that has resulted today in only one luxury car, the RL, despite the nearly 25 year history of Acura? A model in which that luxury car has pitifully small sales, e.g. only 558 sales in all of 2010 so far--about 1/3 of Genesis sedan sales for a single month? Should THAT be the model that Hyundai uses to launch its luxury brand?
  • smarty666smarty666 Posts: 1,503
    edited May 2010
    Yeah, I have to agree with backy here and this is coming from me, who has had two Acura products, one currently. I would hope Hyundai would not follow Acura in their model because currently Acura is heading in the wrong direction. It pains me to say it, but my 3G TL and most of the offerings before 2009 were better than the styling and direction Acura has taken the company. Its very disappointing to see and like Cadillac but for different reasons, mainly due to GM corporate culture/problems, Acura's reputation/image has actually decreased in the last few years, mainly because their lack of a RWD/V8 model, no luxury sport coupes, and various other reasons!

    One of the troubling things with Acura, and Honda to, is there lack of a strong/consistent long-term goal/plan direction they want to take the company. One minute they say they want to compete with Lexus, BMW, MB, and Audi then say they don't, then say they want to focus on smart luxury, then they don't then they go back, and they just consistently remain wishywashy. Both companies have begun to be stagnate in the market in regards to style, luxury features, sport performance, sales etc! They both became to complacent in the fact that people bought their products, because they were a Honda or a Acura, and that meant everything in regards to reliability, quality, etc. If you notice the latest stent that happen with Toyota, Honda did not benefit that heavily from their problems. If you notice, Hyundai, Ford, Nissan, and GM to a lesser extent were the biggest beneficiaries of their problems.

    Problem is, they no longer can simply rely on their reliability/quality reputation to keep up with sales because now, companies like Hyundai, Ford, and Nissan are really rivaling them in quality, reliability, technological innovation (ie CVT or fuel efficient tubro 4 cyls as examples) and feature content in the bang for the buck category. Its unfortunate. Personally for me, I think my 3G TL was a closer, better competitor to the BMW 3, G35, C, and A4 at the time then the new 4G TL is. Just to clarify, I'm just saying the 3G TL was a nice competitor in style, size, feature content, etc but it was by no means better at sport performance and handling than a 3-Series or G35 at that time!

    I mean Acura still makes very high quality/ fit & finish products, great reliability, some of the best technology, namely their nav systems, but they no longer are the best bang for the buck and their is no sign of technological/mechanical innovation, GOOD styling changes, and performance offerings that their main competitors are offering. If Acura and Honda don't get their act together they will be left in the dust. It such a shame, because I do like Acura at heart, I wouldn't have had two vehicles from them if I didn't think so, but I've been turned off with their current exterior styling and probably will be shopping else where the next time around!
  • captain2captain2 Posts: 3,971
    Are you saying then that Acura is a good model for Hyundai to follow? A model that has resulted today in only one luxury car, the RL, despite the nearly 25 year history of Acura
    you had better do some googling on Acura - because the RL had absolutely nothing to do with Acura's success 25 or so years ago - it was really the Legend which in the mid 30ksat the time a proper attempt at a 'luxury' sedan at the time. Had Acura continued with the spirit of what the Legend was, I don't believe that they have the same second tier luxury recognition that they do today. And yes the Acura brand has lost its way over the years with too much emphasis on misc 'entry level' vehicles IMO. Therefore not a model for Hyundai to follow...
    Lexus is probably the best model to follow, with the products Hyundai already has -BUT sold at proper lux dealers with other suitably upmarket products. And don't put too much weight on RL sales numbers, it competes in a different arena than the Gen sedan.
  • I've been turned off with their current exterior styling

    Absolutely.

    I wonder how they sell any at all.

    I had an 1988 legend two door coupe, and when I see an old one now, I still think it looks so much better than their current "astroboy" designs.
  • captain2captain2 Posts: 3,971
    the B9 Tribeca and I don't think it ever met sales expectations.
    yet another example of what a mainstream brand CANNOT do perhaps - Subaru undeniably a mainstream brand - the car of choice in the mountain states. The Tribeca a bit pricey, perhaps too much so for a mainstream brand.
  • houdini1houdini1 Kansas City areaPosts: 5,769
    In my mind there is one big problem with opening a luxury channel. In so doing you put a cap on the lower level brand so as not to compete or be as good as the luxury brand.

    I think this is one of the reasons that we have seen Toyota's and Honda's quality go down in the last few years. They are being decontented, subpar materials are being used, etc. etc. You start a luxury brand and you are competing with yourself. You have placed a ceiling on what you can do with the lower level.

    2013 LX 570 2010 LS 460

  • backybacky Twin CitiesPosts: 18,618
    And the Legend became the RL when Acura moved away from names to letters. So what? Acura, for all its efforts, has one luxury car to show for it--one that is a mere blip on the sales charts. I also remember the early days of Acura giving us the Integra (a nice little car, gussied-up Civic that it was, but no luxury car) and the Vigor ('nuff said on that one). Yet a couple of posts ago you were touting Lexus and Acura in the same sentence as models of how to roll out a luxury brand. Now it's just Lexus. Maybe Hyundai saw the 1-out-of-3 success ratio of the J3 in starting their own luxury brands and decided to try a different approach. .333 is real good in baseball, but not in business.

    Since the Equus will compete directly, price-wise, with the RL, I'll keep in mind what you just said about less than 150 sales a month being something to not put much weight on. :)
  • captain2captain2 Posts: 3,971
    They are being decontented, subpar materials are being used, etc. etc. You start a luxury brand and you are competing with yourself
    an interesting theory - I always thought Toyota though had done a reasonable job upgrading materials as well as fit/finish for their Lexus branded products - I mean an ES350 may be a mechanical twin of a Camry XLE, but go look and them closely and there is something you get for the extra money - other than a name. Don't believe that the ES really competes with the Camry, even if it should. Such is the power of the Lexus name.
    Don't believe that the Lexus only LS has been decontented or even cheapened , although it has gone up in price substantially. The D3, however, have made 'competing with themselves' and artform over the years - think of all the Cadillac and Lincoln rebadges, and FTM all the Chevy std. switchgear you can have on a $100k Vette - for no extra charge. ;)
    Hyundai, if it does decide to try establishing that luxury brand though will have to avoid that temptation to rebadge 'standard' Hyundai products, just for the sake of some sales $. Anything that effectively hurts the exclusivety of (and lends some commonality to) a product, will also damage any luxury pretensions of that product and the 'Genesis' brand. The Germans have generally kept things on a higher plane over the years , although the BMW 1s and MB Cs have got to have you wondering. :confuse:
  • captain2captain2 Posts: 3,971
    Since the Equus will compete directly, price-wise, with the RL, I'll keep in mind what you just said about less than 150 sales a month being something to not put much weight on
    you have this tendency to want to compare things (like GS sales or RL) only when you think those comparisons somehow support your position. I mean if you want to compare Gen sales with something then compare them to the sales of other upscale sedans and if you are going to want to compare Equus sales to something that it more obviously targeted at - try evaluating it in relation to the LS/7/S sales that Hyundai thinks it will be an 'equal' to.
  • backybacky Twin CitiesPosts: 18,618
    So now you are saying we should not compare cars that are in the same price range? How then should cars be classed for comparison? I have tried to do it by the size and features of the car, e.g. compare the Genesis to other large-ish RWD luxury sedans that offer both V6 and V8 power, e.g. GS and M. But you didn't like that comparison because the Genesis cost less than those cars. But you DO think it's OK to compare the Equus, which will start around $50k, with the LS, which starts at $65k and goes to $75k (n/i the stretch version). Why is it OK in your mind to do that, when it's NOT ok to compare a car like the Genesis 4.6 to the Acura RL, which are within a few thousand dollars of each other, or the Genesis to the GS or M?

    Talk about making comparisons only that support your position! :P
  • captain2captain2 Posts: 3,971
    And the Legend became the RL when Acura moved away from names to letters. So what?
    Guess you didn't want to google anything - you only show that you really don't know how good Acura products were when the brand was established. The RL came 10 years after the original Legend and a lot less of a car - to wit:

    takes confidence to name a car the Legend. If it had been forgettable with nothing legendary about it, Acura could have found itself derided for the irony. It would have forever become the butt of automotive jokes, or worse, part of an Alanis Morissette song. Luckily for Honda's luxury division, its bravado paid off with the Acura Legend, a car that's still held in high regard years after it bowed out in favor of an ironically forgettable replacement.

    The Acura Legend was launched in 1986 alongside the Integra sport hatchback to create the Acura brand in North America. Actually co-developed with British automaker Rover (which named its version of the car the Sterling 825), the Legend -- available in sedan and coupe body styles -- was immediately a hit among consumers and reviewers alike.


    a review/article, incidentally, from Edmunds.com

    remembering of course that those shiny new Acura dealers were wonderful and only to be bested by those Lexus (and Infiniti) dealers a few years later.
    The Legend (and Integra to a lesser degree) both had a lot to do with Acura's early success and did establish a 'luxury' brand. What they have done with it (2nd tier lux brand IMO) since the Legend (with the RL etc) is not the point . Honda in effect showed Toyota/ Lexus how to do it. If Hyundai really thinks that somebody is going to pay $50 or $60k for a Hyundai branded product, I think that they should be reading their history books.
  • Integra was a car for import tuners. it had absolutely nothing to do with a luxury. and maybe it's just me, but that's what acura should've been. a luxury brand that has a small hardcore coupe. :) acura maybe have been still cool if they stuck with the original formula. but too bad they had to replace integra with horrendous RSX.
  • backybacky Twin CitiesPosts: 18,618
    edited May 2010
    I don't want to google? Ha. That's funny.

    The Acura Legend, sold as the Honda Legend outside the U.S., Canada, and parts of China, was a sporty luxury vehicle sold from 1986 to 1995 as both a sedan and coupe. It was one of the first vehicles sold under the Acura nameplate, and was the flagship sedan under the Acura nameplate until being replaced in 1996 by the Acura RL (officially badged as the Acura 3.5RL). The 3.5RL was a rebadged version of the third generation Honda Legend.

    http://en.wikipedia.org/wiki/Acura_Legend

    But I like your thought about how the Civic-based Integra helped Acura establish itself as a luxury brand:

    The Legend (and Integra to a lesser degree) both had a lot to do with Acura's early success and did establish a 'luxury' brand.


    If that was OK for Acura, I am sure you'll agree it's OK for Hyundai to use economy cars to help establish itself in the luxury market.

    As for Acura showing Lexus and Infiniti the way... I guess if Hyundai isn't concerned about longevity in the luxury market, they could follow Acura's lead. Or Infiniti's. Infiniti also hasn't done really well in the luxury market--like Acura, only one luxury car, the M, to show for all their money and effort over the years. And the M hasn't been much of a sales success, has it? No, not a great model to follow either. Maybe Lexus--rebadge the Sonata as a Lexus, as Lexus did with the Camry to form the first ES, spruce it up some, and use it to help establish itself in the luxury market--kinda like Acura did with the old Integra. What do you think of that idea? You should like it, since you liked it for the J3.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,916
    what a mainstream brand CANNOT do

    Subaru is more mainstream than they were when I saw my first one in the early 70's in Evergreen, Colorado. Very narrow, but the owner loved it's ability in the snow. But Subaru can't really afford to invest too much in a luxury ride I don't think. Too much risk if it bombs.

    Subaru's owner, Fuji Industries has 4 main divisions and 15,000 employees.

    Hyundai Motor has 75,000 employees. Hyundai Motor is just a division of Hyundai Kia Automotive Group.

    The revenue streams are a bit different. :)
  • lemkolemko Posts: 15,067
    I remember the Acura Legend very well. A co-worker bought one and it truly lived up to its name. That's coming from somebody who is hardly an import fanboy. The Legend was a great name. Acura lost something when it went away from great names like Legend and Integra to today's alphanumeric gobbledy-[non-permissible content removed].
  • lemkolemko Posts: 15,067
    I don't know if the Integra was built with tuners in mind. I think it became a preferred car of tuners as the cars became affordable as they aged and young buyers could afford them.
  • bobadbobad Posts: 1,587
    I think this is one of the reasons that we have seen Toyota's and Honda's quality go down in the last few years. They are being decontented, subpar materials are being used, etc. etc.

    This is one of the most common complaints I hear, and one of the main reasons people jump brands. I can't fathom it, it's beyond my understanding why any car manufacturer would reduce the quality of materials in their cars. Staying the same is OK, charging slightly more is OK. Putting pressure on suppliers to reduce their prices over the long term is the best solution. Reducing materials quality is a sure way to turn off customers and make them look elsewhere. Nothing puts off a customer more than sitting in a new car and noticing it's not as nice as previous models.
  • houdini1houdini1 Kansas City areaPosts: 5,769
    I always thought Toyota though had done a reasonable job upgrading materials as well as fit/finish for their Lexus branded products

    I agree, so perhaps I wasn't clear. The Lexus division is fine...it is the Toyota's, especially the Camry, that has gone downhill, IMO.

    2013 LX 570 2010 LS 460

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