Is There Room in the Luxury Market for Hyundai?

toye

The fact people are having this discussion of Hyundai in the same league with MB or any other luxury brand would have been laughable just 5 years ago. My have times changed. Just as people were discussing Toyota back in the late 80's. It was done once before and it is being done again.

backy

Usually the slams come out when facts are lacking. At least, that is my experience from the 10 years I've participated in the Edmunds Town Hall. If you can't make an argument with facts, logic, and reason, just toss insults and call people "fanboys."

I wonder how many other automakers your remark about MB applies to. I see that trait in Toyota, for example, and to some extent Honda. And I wonder what effect the emergence of Hyundai over the past few years has had to do with this turn towards price. Automakers like MB and BMW faced a double blow: first Lexus in 1989, then 20 years later Hyundai with its initial foray into the luxury market--but at an even lower price point than Lexus, adjusted for inflation. Makes for some tough competition.

captain2

Just as people were discussing Toyota back in the late 80's
Keep in mind what the perception was for a Toyota product back in the late 80s, versus what the perception of a Hyundai product is today. THIS is why Toyota could establish Lexus - and also why Hyundai can't. The Genesis 'line' has been around for more than a year now, and despite a rather hefty advertising budget, I doubt than more than a very few consider it a 'luxury' car in the same way that they think of Lexus/MB/BMW etc etc.
And it really has little to do with the product itself - as I said in a earlier post - Hyundai could rebadge 100,000 LS 460s, sell them as Hyundai whatevers and STILL not have a luxury car - much like VW tried to rebadge the A8 and 'sell' the Phaeton.

millwood0

"Here are some examples: "

it is not difficult to make any of the things you mentioned in your example.

however, it is extremely to make a car PROFITABLY.

fintail

I don't see myself as "slamming" Hyundai. H makes some nice cars, and I wouldn't kick a specifically configured Genesis coupe or sedan out of my garage. I just don't embrace these claims of "innovation" that are exaggerated at best.

My cars haven't spent much time in the shop. Maybe a day per year more than the average vanilla Sonata, but let me tell ya, my cars are a hell of a lot more fun to drive.

The Euro market gets plenty of more sensible cars than we do, in this bloated and pretentious automotive dumb-zone. I suspect a diesel manual cloth interior non-overgadgeted car is going to have less problems than the loaded models the marketers and MBA sycophants have forced us to accept.

backy

I have to disagree with you on the difficulty of making a modern guided missile frigate, industrial robot, or luxury car, but I guess it all depends on what is meant by "difficult". Anyway, the question was not degree of difficultly, but complexity. There are some more complex devices out there than these, but not too many organizations are building space shuttles these days.

toye

What's amazing is that Hyundai is bringing the technology to vehicles today that in the past would have never had now in the near future. Thus they are making other automakers to to do the same. Koreans are showing everybody they are perfectionists. It seems every new product coming out of Hyundai now is at or near the top in quality, fit, design and value.

jimbres

You know, while I respect Hyundai's accomplishment & like the Genesis, I have to say that your posts have the breathless quality of corporate press releases. You would probably do a better job of changing peoples' minds if you dialed it down a bit.

Remember, the topic that we're dealing with here is Hyundai's place in the luxury market. To post, as you did a couple of pages back, that Hyundai has leaped into the early 20th century by making its own steel has little or nothing to do with that.

Focus, my friend.

captain2

What's amazing is that Hyundai is bringing the technology to vehicles today

Like what?

and then,

It seems every new product coming out of Hyundai now is at or near the top in quality, fit, design and value.

you might actually have an argument on this one BUT again how does this have anything to do with technology (or innovation)??? Competing on a basis on price/value and competing on the basis of superior (technologically better) products are generally mutually exclusive.

Agree with the poster that thinks you sound like a press release

toye

Only time will tell... If Hyundai is a flash in the pan or if it is the real deal. Everybody laughed at Toyota in the late 80's...!

backy

Like what?

How many mainstream sedans (i.e. those most people can actually afford) have DI engines and 6-speed automatic transmissions, which is what most of Hyundai's sedan fleet will offer within about a year?

How many non-luxury cars offered standard ESC on every trim level five years ago?

How many cars offered satellite radio standard on every vehicle offered in the US, as Hyundai has since 2007?

How many sedans offer a Lexicon sound system? How about for under $40k?

How many vehicles in the world offer or will offer by the end of 2010 lithium polymer battery technology in a hybrid, as Hyundai will in the 2011 Sonata?

Those are a few examples of "Hyundai bringing the technology to vehicles today." And not just to a few high-end luxury cars, but to the masses. They have also brought luxury sedans within the reach of more buyers via the Genesis. That enlarges the market for such vehicles and gives Hyundai a strong position at the lower end of that market. With the Equus (by whatever name it will be called here), Hyundai will move further up the priceline in the luxury market.

jimbres

Everybody laughed at Toyota in the late 80's...!

What you meant to write, I believe, is "Everybody laughed at Toyota in the late 60s". IIRC, Toyota started exporting the Corona (precursor to the Camry) in '65 or '66, followed by the Corolla in '68 or '69.

By the late 1980s, Toyota was a well established & highly respected brand in the North American market.

toye

No! Nobody (Especially the luxury auto makers) gave Toyota a chance crack the luxury market with its new LEXUS division.

tjc78

How many non-luxury cars offered standard ESC on every trim level five years ago?

I don't think that is entirely accurate. My GFs Elantra ('08 GLS) doesn't have it as far as I know.

How many sedans offer a Lexicon sound system? How about for under $40k?

OK, the Lexicon system is so over-hyped. Lexicon is nothing more than a part of Harmon Int'l which is the parent company of JBL, Infinty, Harmon Kardon, Lexicon, Mark Levinson and others. I have the mid-level 14 speaker in my Genesis and have heard the 17 speaker in the tech package Genesis. They are both good, however, the JBL system in my '06 Avalon would give it a run and the Mark Levinson system in any Lexus would too . Lexicon is really known for their home theater processors not speakers.

You want to impress me with Car audio give me B & W speakers with McIntosh or Krell amplification.

backy

I was speaking specifically of the Sonata. Note I didn't say anything about all Hyundais. When it was introduced to the US five years ago, it was the only non-luxury sedan with standard ESC on every car. It took other automakers e.g. Honda, Toyota, Nissan several years to match that. The Elantra, btw, was one of the first cars in its class to offer ESC at all (late 2006) as a standard feature (on SE trim)--one of the reasons CR named the car its Top Pick in the compact class.

jimbres

Not true. Remember that by this time, Honda had already outlined the solution by creating the separate Acura division to sell luxury cars in the U.S. market. You could say that Honda did the heavy lifting by creating a marketing model that Nissan & Toyota could copy a few years later.

Remember also that the German brands - Mercedes in particular - had made themselves dangerously vulnerable by repeatedly raising prices. Believe it or not, MSRP for a 1988 S-class was just about the same as it was for a 2008 S-class -- & I'm not even adjusting for inflation! The Germans behaved as if they had a complete monopoly of the lux car market, & American buyers were understandably infuriated. They were ready for an alternative.

This was a huge break for Toyota. It was as if Mercedes had painted a target on its back. As good as the Lexus was, I don't think that it would have been nearly as successful if the Germans had priced their cars more reasonably.

You cannot intelligently discuss the Lexus breakthrough 20 years ago without recalling the central role played by German pricing blunders. Because no one - not Mercedes, not BMW & certainly not Lexus - is about to repeat that mistake, any newcomer will have a much harder time today, no matter how good the product is.

bill11783

I think if Hyundai is going to change perception and enter the Luxury market, they will need to create another brand....similar to how Lexus, Infiniti and Acura did it.

When I think of Hyundai....I still think of the crap they were putting out when they started not too long ago. IMO....a name change would help spark things for them.

tjc78

I was speaking specifically of the Sonata

OK, I went back and reread. My mistake.

bobad

Better a hood ornament, created for a specific market and which can be easily removed for other markets,

Symbols, badges, and ornaments are often brought up in this discussion. One would think modern man has advanced far beyond that.

bobad

If Hyundai ever could build a car to the same levels of complexity and sophistication as the Germans, I'll guarantee you that their reliability will suffer as well. 'Luxury' cars and reliability are almost a contradiction in terms, with the notable exception of most Lexus products.

Now we're talking nuances, most of which are nothing more than empty slogans and false legends built up over the years by clever ads.

Lexus, and any Asian care are far, far ahead of German reliability. Lexus proved years ago that luxury and reliability are not mutually exclusive.

The "sophistication" claim is totally false. I would stack the better Asian cars against German any day.

bobad

This was a huge break for Toyota. It was as if Mercedes had painted a target on its back.

The best at anything always has a target on their back. Hyundai's target is Toyota. Their goal is to surpass them in every category. If Hyundai succeeds, they will be in someone's cross hairs. That's good for car buyers.

fintail

But Lexus has proven that Lexus and driving enjoyment are mutually exclusive :shades:

These cars are claimed as so superior , but they still have a hell of a hard time cracking any market but this one.

fintail

If man had advanced beyond that, the semi-skilled designers who concoct lame badges and hilarious almost cynical parody hood ornaments wouldn't have their jobs

fintail

The other automakers may have scoffed via their insular world and ego, but the press and the public embraced the swoopy L from the beginning. The LS was a runaway hit.

captain2

I think if Hyundai is going to change perception and enter the Luxury market, they will need to create another brand....similar to how Lexus, Infiniti and Acura did it.
exactly, perception is everything in the so called 'luxury market', and Hyundai's perceived position IMO, at least for the time being, is still second tier. While jimbres comments about the German superiority complex that existed 20 years ago and the opening that left for J3 luxury brands is true, none of this could have happened without the sterling reputations that both Toyota and Honda enjoyed at the time. The LS sold at the time at least in part BECAUSE it made by Toyota, the Legend BECAUSE it was made by Honda. Interestingly, the slow starter was Infiniti, for 2 reasons - Nissan had nowhere near the reputations of the other two and further they also dabbled too much into the 'lesser' G20s/I30s etc effectively cheapening the Infiniti brand. Honda, of course, and to this day, has made the same mistakes and now is somewhat a peripheral 'luxury' brand due to that.

That the Genesis is made by Hyundai NEEDS to be an asset and not something perceived by anybody as a liabililty regardless of how long our memories are.
Genesis does need to be a brand, needs to be sold independently of its Hyundai branded siblings, and lastly Hyundai needs to further what it is currently doing - improving its overall rep (much like the J3 did in the 70s and 80s) - all before we can talk about 'a place in the luxury market'. While I'm sure that some of our H guys will think this is 'slamming' Hyundai, I think not - only a recognition of the way things are that is also independent of any consideration of how good (or bad) Hyundai's products are actually getting
.
A lot of work to do but something that's all been done before.

tenpin288

While I'm sure that some of our H guys will think this is 'slamming' Hyundai, I think not - only a recognition of the way things are that is also independent of any consideration of how good (or bad) Hyundai's products are actually getting

A few nights ago, I was watching the Detroit Auto Show review on CNBC, and amazingly, (at least in captain2's and a few other's viewpoints), a number of well-respected industry pundits and auto magazine editors actually argued against Hyundai establishing a separate "luxury" brand. Their belief is that Hyundai's current direction and strategy, given the current economic climate and even into the future, is the correct path. By the way, it is 2010, not 1980!

tjc78

A lot of work to do but something that's all been done before.

Yeah, but IMO much harder to do now. Why? Because when Toyota and Honda did it there wasn't nearly the amount of competition there is now. They had to deal with (mostly) Mercedes and BMW. Now Hyundai has them plus Lexus, Infiniti, Acura and to a lesser degree Cadillac. Just too many choices for yet another luxury make in this economy.

backy

It's easy to sit back and think, "It was done that way before, that's the way it needs to be done in the future."

Those are not the kind of thoughts that drive innovation. And innovation is what will drive successful companies in the 21st century. Which as you noted, we are in now!

Watching a football game the other day, I was thinking... what would have happened if someone not too many years ago did not innovate and think of the Shotgun formation? I can think of one positive outcome: most likely, Staubach would not have been able to heave that very first (by name) Hail Mary pass to Pearson, and the Vikings would have gone to the 1976 Super Bowl--and won it of course. But the Shotgun was invented. It was not the same-old way of playing ball. I'm sure some old-timers scoffed at it when it debuted. Look how it and other innovations have changed football. How will innovative technology but also innovative sales, branding, and marketing approaches change the automotive marketplace?

captain2

Their belief is that Hyundai's current direction and strategy, given the current economic climate and even into the future, is the correct path
not amazed at all - Hyundai's (and any other car maker) spending beaucoups of $ on new products) is lousy right now.
But who said that it has to Hyundai itself that funds the new brand and the new dealerships?
Toyota didn't. They literally had existing Toy (and other) dealers lined up for miles, franchise feees in hand, just dying to build palatial new Lexus dealerships for them. While there were undeniably a lot of development costs that Toyota did have to cover - a lot of the financial burden (and risk) was NOT Toyota's.
Hyundai couldn't do this only because that line of dealers not nearly so long.

captain2

How will innovative technology but also innovative sales, branding, and marketing approaches change the automotive marketplace?
I'll give you a pass on innovative sales and marketing - Assurance Programs and Lengthy Warranties (even if they really HAD to do it) both reek of sheer marketing genius.
Innovative technology - NOT YET

captain2

Just too many choices for yet another luxury make in this economy.
agreed, but Hyundai will always have the price/value thing down pat, won't they?
Or at least until we start seeing the first Nanos (India) and Cherrys (China) arrive.

toye

Hyundai is charging into the luxury market whether people like it or not. The products on all levels out now and coming out in the near future speaks for themselves. Recently the USA Today for first time said "It's time to by a Hyundai" I really wished that Hyundai was an american car company as this is what is needed to get back on track and lead the world.

toye

"But if your hestation is the thought of snide remarks from outdated others who still think of Hyundai as a second-tier brand, grow up and make your own choice. The naysayers will be on board soon enough."

USA TODAY
Test Drive
James R Healey
12.18.09

houdini1

Couldn't have said it better myself !!

fintail

Maybe they need to try to develop a performance/tuning division to turn the heads of some of those naysayers. H doesn't seem to shy away from designing its own engines...maybe they can jump ahead of the previous higher line upstart and actually make cars that enthusiasts will like to drive.

As it is, USA Today isn't exactly the automotive gospel

jimbres

Now you've confirmed what I've suspected: you're on Hyundai's PR payroll.

Anyone who publicly displays this much mindless enthusiasm for anything, whether it's cake mix or cars, & who isn't paid for it, must be crazy.

I'm sure that you're not crazy, so it stands to reason that...

captain2

I really wished that Hyundai was an american car company as this is what is needed to get back on track and lead the world.
Yeah right - rah, rah, rah
As it is (and likely will be in any forseeable future) Hyundai 'leads the world' in absolutely nothing - they are, at best, a car manufacturer that is finally getting its act together - nothing more and nothing less.
That said - I can think of 2 and a half 'American' car mfgrs that would love to have Hyundai's product line and finances.

backy

Anyone who publicly displays this much mindless enthusiasm for anything, whether it's cake mix or cars, & who isn't paid for it, must be crazy.

OK, then... what does that make the folks here who display so much mindless dis-enthusiasm about this topic? :confuse:

Or is it only OK to be enthusiastic here if you are a Hyundai nay-sayer?

BTW, I don't see how posting a direct quote from a respected automotive journalist is in any way "mindless enthusiasm." Instead, it shows that the person's opinion is in fact not mindless, but backed by other, professional, opinion.

captain2

maybe they can jump ahead of the previous higher line upstart and actually make cars that enthusiasts will like to drive.
One of the things that has made Toyota (and Lexus FTM) successful is that they correctly called the American preference for softer boulevard rides - quite different from the tighter, more enthusiast oriented, European preferences. Lexus manages a reasonable balance - soft without being sloppy while the Germans seem to do a good job with firm without being annoying. Americans seem to prefer the former - maybe part of the reason why cars like the LS are starting to define the large luxury sedan segment - at least in this country.

backy

I guess some folks didn't notice a relatively new Hyundai model called the Genesis Coupe? Definitely targeted at enthusiasts, especially with the R-spec and Track trims. It has its flaws, but as Hyundai's first serious effort in the sports coupe market, I think it's credible. Beating out the new Camaro in everything but subjective "gotta have it" scores (C/D) isn't too bad for a first try.

fintail

Yes, Toyota has brilliantly developed products that meet the old fashioned American demand for uninvolved driving.

However, there remains ample profits to be made on sedans that are actually for drivers - especially on a global scale , where the Germans remain strong - and their cars still sell without much problem in NA too. I have to believe H wants to move upmarket in places other than NA and those few places where the current Equus is seen as good design...so maybe they should give some driving development a shot. Toyota probably still employs a handful of people who like to drive (hence the few sport tuned Lexus)...H must have some similar people.

jimbres

OK, then... what does that make the folks here who display so much mindless dis-enthusiasm about this topic?

Or is it only OK to be enthusiastic here if you are a Hyundai nay-sayer?

Not at all. Consider your own posts, which I've enjoyed reading because they show a thoughtful, critical intelligence. You like Hyundai's products - as do I - & you're not afraid to defend the company when a defense is called for, but you're not about to pretend that Hyundai is somehow more than what it is - a comparative industry newcomer that's covered an impressive amount of ground in a short time.

Toye's posts, though, lack nuance & read like press releases. There really isn't any meaningful difference in tone between his stuff & the rants of a close-minded Hyundai basher. It's "Hyundai is perfect!" versus "Hyundai is trash!" - nothing that advances the conversation, which is supposed to be about Hyundai's place in the luxury market.

backy

To be fair, then, why not jump on those who say the same exact thing in every post, ala "The Genesis has to have its own brand to be successful in the luxury market."?

There's outliers on each side of the discussion. And the vast middle. The outliers can be hard to take sometimes, but at least they are passionate about what they believe.

Personally I found Mr. Healy's comments interesting and that they did "advance the conversation" beyond "I think..." to what a professional automotive reviewer thinks.

toye

Hey I'm the average american consumer that makes sure that my money is spent on the best possible product that is out there. If I believe any product is great I let people know about it. Yes I've been with Hyundai for many years and have seen them grow. Last year I earned my first chance to buy a luxury vehicle, and I looked at everything in 40 to 50K range and kept on going back to the Genesis. If this would have been 5 or so years ago I would have made the switch to Lexus, or BMW etc. I couldn't be happier with my purchase.

jimbres

Perhaps we've run out of things to say, then. Certainly, the Genesis itself is more than good enough to compete in this market segment. Although I've criticized Hyundai for not offering an AWD version - IMO, this is why the car sells poorly in Northern markets - this isn't a criticism of the basic design, which is first-rate.

As for the marketing question, I'm partial to the separate brand approach, having bought 2 Lexuses (or is it Lexi?) & a BMW, but I'm willing to admit that this might not be the only way to sell a luxury sedan. I'll just wait & see how Hyundai handles this.

captain2

why not jump on those who say the same exact thing in every post, ala "The Genesis has to have its own brand to be successful in the luxury market."?
and to say such things is 'Hyundai bashing' or simply a comment on what has shown to work with the brand conscious American consumer???

stever

Anyone who publicly displays this much mindless enthusiasm for anything,

I think you're way off-base. There are 1,000s (millions?) of people who get enthusiastic about their cars and the brand and defend them to the death. Just look at the Ford v Chevy wars over on pickups sometime, not to mention all the Calvin stickers on their rides.

We certainly have a lot of members here who have "fanboy" user names.

Meanwhile, instead of trying to disparage other members, stick to disparaging the cars.

bobad

If man had advanced beyond that, the semi-skilled designers who concoct lame badges and hilarious almost cynical parody hood ornaments wouldn't have their jobs

I wasn't talking about the designers.

I was talking about the almost religious significance given to cheap symbols by supposedly intelligent people. Time is better spent researching, driving, and evaluating the car itself rather than worshiping symbolism.

bobad

Maybe they need to try to develop a performance/tuning division to turn the heads of some of those naysayers.

Maybe you need to take a V8 Sedan and V6 Coupe for extended drives. You may be surprised. (better leave your checkbook at home).

bobad

but you're not about to pretend that Hyundai is somehow more than what it is - a comparative industry newcomer that's covered an impressive amount of ground in a short time.

Thank you. Someone finally gets it. Hyundai is still covering ground, and will continue to do so at a speed the others can not match. Once you understand that, it's easy to project the outcome. The automotive landscape will be unrecognizable in 10 years, and maybe even 5. Hyundai will be a big factor in the change.