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Is There Room in the Luxury Market for Hyundai?

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  • OK then. Based on that logic, we must eliminate BMW, Infiniti, Acura, and Lexus from consideration as a luxury automakers, since they sell (or in the case of Lexus will soon sell) mass market cars from the same dealerships that sell the luxury vehicles. And in most countries besides the US, we must eliminate MB also. That leaves a pretty small luxury marketplace.

    Took the words right out of my mouth.

    The most important components of success are talent and the inability to give up. Who wants to bet a Korean Co lacks either?

    I remember when Japanese cars were the disposable junk bought for the price value. No one's saying that now.

    I find the Hyundai bashing somewhat humorous. We're not dealing with Yugo's and Trabants built in a communist country, we're talking cars from a country that is hungry to be the best.

    They already dominate the LPGA, and it's no accident.

    I only wish the American Co's had the ability to move as fast. I would love to buy an American car I could love. Cadillac is about there, but I don't fit well in the cockpit's of the sportier versions, and I don't like the origami styling.

    Maybe a Buick? Oh wait, the newest are really German designs.
  • fintailfintail Posts: 33,506
    I was aiming at the lux category rather than the overall market. For general cars, H is gaining everywhere indeed - even the Euros have said nice things about the latest models - and they aren't tied to advertising demands as strongly as biased and bought-off American publications (which mean they will call something out as deficient if it is). But given the inability of Lexus to tear things up outside of this continent, I don't know if the higher line cars are going to go over as well.

    If I want rhetoric, I will look for Krafcik :shades:

    On a note somewhat related to the highline H cars, I see the Phaeton is coming back to the states. I wonder what brought that on.
  • captain2captain2 Posts: 3,971
    we must eliminate BMW, Infiniti, Acura, and Lexus from consideration as a luxury automakers, since they sell (or in the case of Lexus will soon sell) mass market cars from the same dealerships that sell the luxury vehicles.
    ahh but they aren't branded the same are they?.
    In the often obtuse and illogical world of brand perceptions, folks will buy a true lux car simply because of that badge. Hyundai's only mistake here is NOT the cars they are choosing to now produce, it is the fact they are not estabishing that separate luxury brand (and dealership) to sell it - something the brand and status conscious AMERICAN consumer has repeatedly demanded.
    You can crow all you want about how wonderful a Hyundai this or that may be - but it won't change the fact that a Hyundai branded anything will never be considered on the same level as those German brands, and even those J3 ones.
  • toyetoye Posts: 351
    For most people never say "never"

    In your case you will never accept that Hyundai could achieve it.

    You are still stuck in the dayswhen you lived in Korea in the late 80's when they were still making Excels.

    It will be the next generation that will determine Hyundai's future as they will have little or no knowledge of Hyundai's past just what they see now the future product.
  • captain2captain2 Posts: 3,971
    you're confusing Hyundai's ability to do something with the American consumer's ability to accept it. Hyundai has certainly demonstrated the ability to build some pretty damn fine automobiles, but getting the consumer to accept it is something entirely different. Yes, it's been done before but not without that brand differentiation that the autobuyer demands.
  • captain2captain2 Posts: 3,971
    You are still stuck in the dayswhen you lived in Korea in the late 80's when they were still making Excels.

    actually more like the mid 80s, and I actually worked in Ulsan, a very very large (and impressive) facilility that made cars as well as many other things. The Korean predecessor to the Excel was called the Pony over there BTW and were also almost all LPG fueled. Yes they were junky deathtraps, not far removed from those first 'disposable' cars sent over here. Not so much different than those first Toyotas sent over here in the mid 60s.
    My how times have changed! A Japanese brand that became a standard by which others were judged and now a Korean brand that someday would like to do the same?
  • toyetoye Posts: 351
    In many cases already there now!!

    Example: one article noted that Hyundai should be no longer considered an underdog but has demonstated thru its products that it is now a leader.

    Also again its not you or me that will decide if Hyundai will become recognized as a maker of luxury automobiles but our next generation, assuming Hyundai continues to tranform itself. Will there be bumps on way ... of course.

    Who would have thought just 10 years ago the amount of progress that Hyundai has made especially in the last 5.
  • backybacky Twin CitiesPosts: 18,682
    On a note somewhat related to the highline H cars, I see the Phaeton is coming back to the states. I wonder what brought that on.

    Option 1: If at first you don't succeed...

    Option 2: "Ach, Franz! Hyundai is selling luxury cars under their own brand in the US; why don't we give it a try again?"

    Option 3: Hope springs eternal.
  • backybacky Twin CitiesPosts: 18,682
    ahh but they aren't branded the same are they?.

    Actually in all but one case, they are, and in EVERY case they are sold alongside the luxury models from these brands:

    * Infiniti G25, starting about $30k, overlaps the Sonata (one of the cars you mentioned re Hyundai selling mass market cars) in price.
    * The new Lexus CT 200h will start at $27k (source: C/D) and also overlaps the Sonata in price.
    * The Acura TSX starts at about $29k, and overlaps the Sonata in price.
    * BMW dealerships sell BMW's Mini Cooper cars alongside BMWs in the same dealerships; they start at under $19k and overlap both the Sonata and Elantra in price.

    And MB sells the A Class in many countries outside the US, and that is definitely a "mass market" car in the same general price range as the Sonata (and maybe the Elantra also).

    So if it is a mistake for Hyundai to sell their luxury cars alongside mass market cars with the same brand, in the same dealership, it must be a mistake for all those other automakers. Unless you are applying a double standard?
  • fintailfintail Posts: 33,506
    I think option 2 sums it up..someone else is trying the value-brand luxobarge route, might as well try to join in. All of the development costs on that thing are likely long paid for, so any that do sell are all black ink.

    The model never died off in Europe, although from what I can tell was mainly bought by corporate and rental fleets.
  • fintailfintail Posts: 33,506
    MB and BMW in those many countries have always been mass market brands, just with highline offerings. It was that way from the start. The thought of MB and BMW as lux only is a very American construct. In other places, and in the past, the highline offerings were so good, and the cars were so good in competition/sport, that the brands acquired a halo that worked its way into everything. Not easily repeatable.
  • captain2captain2 Posts: 3,971
    OK., but $30k entry level models are a whole lot different than a Hyundai dealer that has half his inventory (or more) in things that are sub $20k. A much different buyer demographic at a Hyundai (or Ford Chevy etc) dealer than at those Lexus/Infiniti dealers usually. Not to mention the low level market sales tactics, the comparatively grundgy dealerships, the low life newbie sales staff etc etc.

    PS you'll have a helluva time finding any Mini for $16k - they easily will also get past $30k - even if you bite on the rather strange assertion that a Mini must be a BMW because they often are sold at the same place.

    BTW 'entry level models' are one of those things that plainly test a brand's place in the luxury market. It may make it easier to own a BMW or MB, for example, but those 1s and Cs are really nothing more 'upscale' with the badge and they dilute the brand exclusivity that is a very important part of what is and is not luxury.
  • captain2captain2 Posts: 3,971
    Who would have thought just 10 years ago the amount of progress that Hyundai has made especially in the last 5
    no problem with this either although my contention is that 5 or 10 years is not likely enough time to change those second tier perceptions that Hyunndai did earn for their past indiscretions.
    Thinking again back to 1990 - it was in part Toyota's sterling reputation as well as the way that they chose to market (swanky Lexus dealerships) that was the reasons for the LSs success. IMO when the Hyundai association becomes an asset and when they choose to sell the Genesis products in a similar manner THAT is when Hyundai may find the 'room'.
  • backybacky Twin CitiesPosts: 18,682
    edited August 2010
    OK., but $30k entry level models are a whole lot different than a Hyundai dealer that has half his inventory (or more) in things that are sub $20k.

    How did you figure that? Let's look at Hyundai's US sales YTD and see:

    CARLINE July/2010 July/2009 CY/2010 CY/2009
    ------- --------- --------- ------- -------
    ACCENT 3,960 7,634 31,038 40,562
    SONATA 17,836 13,381 107,085 73,862
    ELANTRA 18,215 13,616 75,779 53,520
    TIBURON 0 151 0 8,497
    SANTA FE 7,047 6,793 51,423 40,266
    AZERA 218 306 1,799 2,257
    TUCSON 3,698 1,106 23,387 8,658
    ENTOURAGE 0 32 0 3,375
    VERACRUZ 823 519 4,177 7,289
    GENESIS 2,309 2,015 15,200 11,953
    TOTAL 54,106 45,553 309,888 250,239

    The Accent and Elantra go for under $20k (might be possible to get a loaded Elantra Touring over $20k, but let's be conservative). The only Tucson that is under $20k is the strippo base stick model, and that's $19.8k, no options. If you've looked, you know there's almost none of those around--but again let's be conservative and say 4000 of the 23,387 Tucsons were base stick no-options models. That's a total of 110,817 sub-$20k vehicles on Hyundai dealer lots in 2010--a little over 1/3. Hardly 50% or more as you asserted. Hyundais are no longer priced as low as they were a few years ago. For example, the new Mazda2 is priced lower, comparably equipped, than the Accent sedan! And the Elantra is pretty close to cars like the Corolla and Sentra in price. Ditto the Sonata to the Camry.

    BTW, I didn't say the Mini was $16k--I said they started just under $19k.

    Also I assure you that not all Hyundai dealerships are "grundgy", employ low-level market sales tactics, and have "low life" sales staffs.
  • backybacky Twin CitiesPosts: 18,682
    edited August 2010
    Not easily repeatable.

    No, not easily repeatable. But repeatable. Or doable, even if not done in quite the same way automakers like MB and BMW did it.
  • iluvmysephia1iluvmysephia1 Posts: 5,675
    edited August 2010
    would it be over-simplification to say that captain2's argument against Hyundai hitting the bigtime as a luxury car maker is simply because they didn't start a new luxury brand up with a separate luxury car name? And build new separate luxury dealerships for their new luxury Hyundai brands?

    Is that with this month's-long battle is based on? Fully completely? If that's enough to stop Hyundai luxury car market opportunites then luxury car buyers are simply their own cup of tea completely. The first image of this type of buyer that just popped in to my head was none other than The Donald. Donald Trump.

    I rest my case. I have people telling me online that this carmaker from Germany, VW, has grandiose plans of being the world's top automaker by the year 2018. Can VW get away with grabbing luxury car market share, Edmunds' panel of luxo-car experts? I'd love to know this.

    Because I don't trust their carmaking skill quality. Got a lot of internet reading in over the years that tells me that VW is known for crappy reliability, especially related to their ability to electrically wire their rigs. That stay together electrically and continue to work fine, for years, under all types of weather.

    Hyundai and Kia and Mitsubishi don't have these problems. Who gave VW their excessively good feelings about theirselves, I wonder?

    Panel, I'd love to read your comments regarding these issues.

    2008 Mitsubishi Lancer GTS

  • toyetoye Posts: 351
    If Donald Trump was going to promote or buy a Hyundai I would not be impressed..and would be skeptical on why...he's way to superifical....Now if say Warren Buffet bought a Hyundai now that would be a right fit!!!
  • LASHAWNLASHAWN Posts: 303
    You guys are blowing this luxury status thing way outta proportion. Anyone can make a large automobile and fill it up with all the bells and whistles sell for $60k+ and call it luxury. In my opinion only Rolls Royce, Bentley and Maybach(maybe Maserati) are true luxury cars because only the rich can afford them. Hyundai does not have to establish a luxury brand to sell the Genesis and Equus. The Genesis is doing very well now and so will the Equus when it comes. Do we all really think having that luxury branded dealer will make them sell even more than they are now?
  • captain2captain2 Posts: 3,971
    Anyone can make a large automobile and fill it up with all the bells and whistles sell for $60k+ and call it luxury
    or $30k or $40k ..... 'luxury' is certainly subjective and may indeed be nothing more than a collection of bells, whistles and other specs as somebody like backy would have us believe. OR what is luxury could certainly be that and more - also getting into those murky areas that go beyond some wood shards in a leather interior, maybe something to do with how a brand is perceived, how prestiguous that brand is, how difficult it is to attain (also a variable definition as you suggest) etc. etc. Which has been my point all along.
    Can Hyundai ever elevate its brandname to a level approaching those German brands or even the premium J3 ones? Not if they continue to live in the lowest extremes of the auto business IMO- simply because mass market brands by definition can not have the necessary exclusivity to also have a place in what can be considered the 'luxury' market.
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