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Is There Room in the Luxury Market for Hyundai?

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  • fintailfintail Posts: 32,909
    There has long been speculation that Lexus sold the original LS below cost in the early days to get the brand going - the steep price inflation of that model in its first several years backs up the theory. Maybe H is doing something similar.
  • captain2captain2 Posts: 3,971
    That is true in the US, if you don't consider manufacturers such as Toyota and Nissan who have a separate luxury brand
    and what differerence does it make that MBs may be regarded as taxicabs elsewhere in the world, or that a Hyundai product might be real luxury in Outer Mongolia??? As fintail has noted, even the German brands have a less exalted position overseas than they do here. Does that really effect how they are regarded here? Nope
    The reason why the J3 can be luxury mfgrs is because they established the brandnames and the mechanism (dealerships) to do it. From a perception point of view a Lexus is not a Toyota, a Acura is not a Honda, an Inifiniti not a Nissan etc etc. - if you think for one minute that all those folks that saw fit to layout 40 large on something like a ES, for example, think that they bought a Toyota - then it is quite apparent that you understand neither the carbuyer or the 'luxury' market. But don't feel left out - Hyundai doesn't seem to understand this either.
  • captain2captain2 Posts: 3,971
    And I am shocked the new and amazing Genesis is being discounted...has the hype calmed down? Luxury vehicles aren't selling? BMW and MB are having very good sales right now.
    not so sure that the 'hype' hasn't moved to the Sonata. Perhaps as it should, it is Hyundai's bread and butter, the ultimate mass market refrig, and has been improved to some extent.
    But it too will invariably fall prey to the traditional Korean discounting philosophy - only a matter of time - just like the Gen - a car that logically shouldn't - as you note.
  • LASHAWNLASHAWN Posts: 303
    If I could get either at a VERY GOOD discount, it wouldn't bother me a bit. Means extra cash in my pocket and I'd be driving one of the hottest cars out now.
  • captain2captain2 Posts: 3,971
    If I could get either at a VERY GOOD discount, it wouldn't bother me a bit
    perhaps it should - one of the main reasons that Hyundais tend to have poor resale values is the fact that they get discounted heavily initially and conversely the reason why Hondas, for example, usually have good resale values is because they are not discounted as much.
    If the Gen sedan is being sold at a ''good discount', it effectively screws anybody that had bought one early (at trade in time) and also will usually mean poor resale for what you bought - despite what you think is your good price.
    You are right about one though - Hyundai historically has been very good at selling their products at prices where at least their customers think they are getting good prices. ;)
  • sweendogysweendogy Posts: 1,052
    for the consumer it stinks when you drive off the lot and your car is worth alot less but for those who keep cars a long time its not that big of hit- infact getting a better deal out the door (and the ability to invest what was saved) is something to consider in this arguement.

    For the car company its about volume -and market share.. these cars are selling like hotcakes (sonada) -- i think honda and toyo are taking notice to whats happening in korea.
  • captain2captain2 Posts: 3,971
    for those who keep cars a long time
    of course, but not that many do - particularily those who can afford to buy something new - certainly about the worst time to buy any car. And then, of course, we have the popularity of leasing...
    Depreciation is the major part of 'cost-to-own' studies and there is a reason why that the least expensive cars to own are often not the ones that are cheaper to buy initially. If this was true, things like Hyundais would logically run away with comparisons like this. If Hyundai can continue to improve its name and reputation, and be a bit less free with those big 'discounts' , this will change.

    PS 'Investing what was saved' is a totally un-American concept - we do seem to what to spend it even before we have it, don't we? Maybe even on backy's floormats ;)
  • backybacky Twin CitiesPosts: 18,624
    and what differerence does it make that MBs may be regarded as taxicabs elsewhere in the world, or that a Hyundai product might be real luxury in Outer Mongolia???

    Well, Mr. Fintail at least seems to think it's VERY important that luxury automakers have a firm foot in the taxicab market. I think it is relevant that other luxury automakers, such as MB, sell a lineup of vehicles including inexpensive ones under one brand in much of the world. Unless this is a US-only discussion--which I don't think it is. As for Outer Mongolia--not many luxury cars being sold there I'll wager, but many, many luxury cars being sold outside the US in markets like China, Europe, Japan, and the ROK. Are those sales any less important to luxury automakers than those from the US? Do the profits from those other parts of the world spend differently? :surprise:

    Since buyers in many countries, including the US, routinely shell out more than $40k for Toyotas and Nissans, and automakers like Toyota sell their luxury vehicles under their "mass market" brand names outside the US, I would say I do in fact understand the carbuying and luxury market pretty well, as does Hyundai--at least in terms of today's realities. Maybe not as of the realities of 20 years ago. But that is moot now, isn't it?
  • backybacky Twin CitiesPosts: 18,624
    You are living in the past again. Hyundais HAD poor resale values. But this is 2010, and that has changed. Check out resale values of the latest generation Hyundais and you'll see they are very competitive, even close to class-leading in some cases (e.g. Genesis and Sonata). And the huge discounts relative to others is also a thing of the past. (Priced a 2011 Sonata recently?)

    If you want a "good discount" on a car, everyone knows you do NOT buy one right when the model or latest design is introduced. Then it's a "gotta be first one on my block" syndrome. Those who waited a couple of years can now get a good discount on the two-year-old Genesis--especially given current economic realities. But then, big discounts are easy to get on almost anything in the luxury marketplace. Or we can do as Mr. Fintail likes to do, wait about 3 years and pick up a slightly used luxury car for a small fraction of its original list.
  • backybacky Twin CitiesPosts: 18,624
    Hard to fathom why someone cares what I think about a distant dealership group.

    Yes, it is. Harder still to fathom why someone would ask someone else to name one dealer selling a certain vehicle below a certain price, with no direction that the dealer be close to the person's (unstated) location, and given that the requester has no intent to buy said car now or in the forseeable future.

    You own a used MB. I've owned a used BMW. I own two Hyundais. You've owned none. So what? Anyone interested in this topic is welcome to post here, right, Hosts?

    Are you telling us new MBs and BMWs are not discounted in any way?

    I could buy a new Genesis 3.8 for the price of a used C Class or 3 Series. And my backseat passengers would welcome the extra room.
  • fintailfintail Posts: 32,909
    And it's even harder to fathom why someone would complain about such requests, but still fulfill them when said requests can be easily ignored ;)

    I've also driven MB since I was 18 year old and will likely own more. Anyone interested can post indeed, I am not the one who started questioning, am I? And we all own used cars, unless we are dealers, we don't own new cars.

    I don't see the latest and greatest supposed game-changers from Germany being directly offered for 10%+ lower than the MSRP stated on banner ads that appear directly on dealer websites, no.

    I could buy a 3 year old and still under warranty E63 AMG for the price of a loaded Genesis. My sensory receptors would welcome the extra performance.
  • captain2captain2 Posts: 3,971
    Are those sales any less important to luxury automakers than those from the US?

    yes, they are - the Buick LaCrosse (with a wheezy 4 banger in it of all things) is perhaps THE luxury car in China - make any diiference here? or maybe you're ready to proclaim it a 'luxury car' because the Chinese think so. How Toyota/Nissan/Hyundai or any other mass market mfgr is perceived outside these borders also is of no consequence - if Toyota wants to sell a luxury car here it will be labelled a Lexus, Nissan an Infiniti etc. - all except Hyundai, of course, which doesn't have one.
    And NO NO NO it is only a 'moot point' in your own H biased mind - today's realities as you call them remain that luxury cars are sold only with luxury brands.
  • captain2captain2 Posts: 3,971
    And the huge discounts relative to others is also a thing of the past. (Priced a 2011 Sonata recently?)
    and you want to base this claim on a history of a whole year? The Sonata (while I question the abandonment of the V6) is definitely improved, is selling better, and is also on its new model honeymoon. Talk to me about Sonata prices holding in another 6 or 8 months., we'll see. They are already buying down the finance rates, no telling when those big arss rebates will show up as well.

    An interesting concept though - a Hyundai that actually sells for some number more closely related to MSRP. Honda and Toyota have only beeen doing that for the last 25 years or so. The Hyundai dealer (and salesperson) would be lost - along the lines of 'how to sell a product that isn't necessarily the cheapest around'. The earth would shake, start rotating clockwise on its axis and then that salesmen would finally figure out that it really is possible to sell something on it merits as opposed to its price.

    But, throw off your 'H' colored glass for a bit, and honestly tell me that you think that average Joe autobuyer doesn't EXPECT discounts at that wonderful Hyundai dealership (just like he does at a D3 dealership) , and IF faced with a situation like an unwilling to negotiate dealer (think Honda or Toyota here) that he won't move on down the street and buy an Accord instead. Reputations and/or perceptions however justified - are nonetheless quite real
  • backybacky Twin CitiesPosts: 18,624
    What the Hyundai dealers are doing (some at least) is resurrecting a practice first popularized by the J3--adding "ADM" stickers to cars. Whoa.. I feel the ground shaking a bit! :)

    The uplift in Hyundai prices in the past few years is real. If you had been out in the marketplace looking at Hyundais vs competitors during that time, you would know that. Buyers (myself included) would love to get the Hyundais of today for yesterday's prices. Eventually reality intrudes on Shangri-La. If they don't like today's prices, they are free to go down the street and buy a Camcord or whatever (or a used S Class). However, record numbers of buyers are still choosing Hyundais, even with the uplift in prices. That's not rose colored glasses. That's reality, and the facts/numbers back it up.
  • backybacky Twin CitiesPosts: 18,624
    Yeah, just huge ads proclaiming the low lease rates and rebates on MBs. If MB dealers want to play the "hide the sales price and only show the lease price" game (also played well by Honda), that's up to them. I prefer a more open approach.
  • sweendogysweendogy Posts: 1,052
    "PS 'Investing what was saved' is a totally un-American concept"

    -- http://www.kvue.com/community/blogs/smart-money/People-saving-more-for-retiremen- t-100851749.html

    PS. prob should do some research before you make statements cost to own studies are great but in these tough times, for those people who do not want to lease a car because they want to keep a car, buying the cheaper (dollar amt) car is prob a better way to go. (certainly if your looking to invest.. see above)If you looking to flip cars every 2-4 years then maybe you have a point. To say Hyundais would run away with comparisions -- have you looked at consumer reports lately ?? they are full of hyundais - name and reputation are well my friend.. Big "discounts" - try getting a sonada they cant produce enuf for demand.

    http://www.autospies.com/news/Hyundai-to-ramp-up-production-of-the-hot-selling-2- 011-Sonata-53945/

    love the use of PS - its a nice touch
  • fintailfintail Posts: 32,909
    edited August 2010
    Wouldn't an open approach be the corporation showing the bottom line?

    I checked the MBUSA special offer site...loads of lease deals - as per usual many of them not looking too exceptional, no use of the word rebate.
  • backybacky Twin CitiesPosts: 18,624
    Check dealer sites... that is what you were talking about anyway.

    From dealer advertising to corporate accounting practices... large leaps we make here. Are you saying Hyundai's finances are not available for review?
  • tjc78tjc78 JerseyPosts: 5,023
    However, record numbers of buyers are still choosing Hyundais, even with the uplift in prices

    Yes they are, however, as with any model that is new they will sell closer to MSRP. There is still quite a "buzz" going on with the Sonata. Let's see in 6-9 months what the selling prices are. As soon as volume falls off there will be incentives flowing to keep the volume up. Its not just Hyundai doing this, its all makes.

    I remember way back when the 05 Avalon was introduced the pricing was holding close to MSRP. There are many Edmunds members (including Captain2 IIRC) who had to pay close to MSRP to get one. When I bought my 06 I had no problem buying right at invoice price.

    Same thing with the Genesis. When I first test drove one there was a 3K ADM on the sticker. I remember to this day pointing to it and saying to the salesman, "in six months these will be selling at invoice" He was not amused, however, who was right? ;)

    1999 Chevy S10 / 2004 Merc Grand Marquis / 2012 Buick LaCrosse

  • tjc78tjc78 JerseyPosts: 5,023
    in the SFTSF forum Jimbres wrote this and it is soooo true...

    Still, that's always been true to some extent of all luxury brands, & that's the point I was trying to make to "luvmybuicks": a luxury brand, whether it's BMW, Mercedes, Cadillac, Rolex or the Hyundai Genesis, can't be considered a true sales success unless it attracts some badge-chasers. After all, the definition of a luxury is something that's not essential - something that at least some of us buy because we want to show off.

    One of the reasons that GM fell into the soup is that Cadillac lost the prestige-seeking customer.

    1999 Chevy S10 / 2004 Merc Grand Marquis / 2012 Buick LaCrosse

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