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Honda Civic vs. Hyundai Elantra
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Comments
But there are some cost savings involved, for example:
* Hyundai is a much larger company than Honda and is more horizontally integrated, thus has greater control of the end-to-end process. For example, it produces its own steel, makes its own industrial robots, and makes its own container ships. I don't know that Honda does all that.
* Labor rates in Korea are lower than in Japan, but are going up. As Hyundai shifts production to the U.S., its labor costs will continue to rise.
Elantra GLSes normally sell for about $12,000 (-Edmunds TMV), and Civic LXes normally sell for about $16,000.
Considering that these cars have about the same level of sophistication and equipment, and also factoring in that the Hyundai's price includes the 100,000 mile warranty, where is that other money going?
Does a Civic cost $4000 more than an Elantra to build? I'd guess no.
Honda pays US workers salaries in US dollars. While Hyundai pays its Korean workers Korean wages. Maybe this is why the new Chevy's are built in Korea? Maybe because the labor is cheaper there? Just a hunch. :-)
BTW, only one Chevy--the Aveo--is made in Korea. It's way cheaper to use Daewoo's existing facilities to make a small car than to tool up a factory in the U.S. to make a car that will sell in limited volume, at a small profit per car.
However, opening US production facilities is actually financially very useful and not just beneficial for logistic and marketing reasons. Producing the US market cars domestically in the US is an important hedge against a weak US dollar, such as we've seen the past 3 years. It's kind of like the principle behind investing in both stocks and bonds at the same time.
Currency issues are quite interesting. One of the reasons why Japanese cars have been so much better than American cars for quite some time is that the ¥ wasn't worth as much as the $ for a really long time. Hence, things cost less in Japan and they could cram a lot more into each car for less money. Now that the US economy has diminished, the $ is weak and American cars can have more stuff put in them for less money. This is a simplistic approach for explaining this affect, and yes, many other factors play into it, but for the most part it is true. So when you see companies like Hyundai shifting production to the US, you aren't going to see their costs rise, as labor is not a big cost in car manufacturing. The USA Hyundai Motor Manufacturing Alabama plant has the ability to be fully automated, and while not fully automated, has the capacity for 300,000 vehicles annually. Do you know how many people work there? 250-300... That's not a lot of salaries for producing 300,000 cars.
This is not the way a Japanese comany operates, I worked for a Japanese corporation in Japan and have some insight into how quality is viewed.
US - for most companies quality is achieved by Quality Control = Inspections
Japan - for 99% of the companies quality is engineered into the product and the process. There is no need for QC, although there is a small QC department that tests random products. The product and processes are designed in such a way that it eliminates possibility of making defects, thus eliminating reliance on inspections.
This approach was designed by an American statistician (Dr. Deming) while working for Western Electric in the 1930's, but was quickly abandoned in the US after WWII. He was invited to Japan to help Japan rebuild their indstry. They have taken his teachings to the full potential and beyond.
Japanese workers take pride in the job they do, no matter how miniscule it is. Whether it is Janitor cleaning the bathroom or a VP running a corporation. The drive to do good job is the same. It would bring great shame on one's family to not to do quality work.
The work ethics go both ways, if a corporation is not doing well, there are no massive layoffs. If corporation has to let someone go, the VP woudl personally call other companies and find a job for the laid off worker. If the company is not performing well, only the people responsible for the downfall get punished, the VP's and other executives lose their bonuses and their salaries are reduced, until the bring the company back out of the red. When was the last time any US company punished the people responsible for the company's downfall? US companies lay off some workers to increase profits so that upper managment can get their million dollar salaries and bonuses. This is why Japanese workers devote them selves to their job, while US workers just go to work.
I agree that UNIONS is one of the detriments to quality automotive products. Neither Honda nor Toyota allow unions at the US assembly plants.
One factor contributing to the improved quality of Hyundais (like the Elantra) in the past few years is the use of new factories with state-of-the-art robotics. Hyundai built a new factory for the current-gen Elantra. How has Honda's manufacturing process for the Civic kept up? Has it slipped any since the legendary Civics of yore? For example, the current-gen Civics were fraught with recalls and other problems when they came out. Honda used to introduce new cars in Japan before sending them to the U.S. Now they are introduced globally at about the same time. I wonder if that has had an impact on initial problems (the transmission, braking, and rattles problems on early current-gen Accords being another example)?
Tanya2, have you seen the new Sonata yet, or read reviews of it? Also, how many times have you attempted to sell a used Hyundai? How many Hyundais (specifically Elantras for this discussion) have you owned? Driven?
P.S. My '04 GT has a 138 hp DOHC CVVT engine. The SULEV models have 132 hp, however--not available in my state. What are the comparable power and emissions figures for the Civic?
Enterprise sells used rental Sonatas non-dicker -- at a price within $1000 of new-- one year old with 30K for godsake. They all move within a week or two. I don't think that's smart, but hey...Hyundai's get about the same price as Mazdas and do better than Mitsubishis, though not as good as Toyotas and Hondas at Enterprise lots.
Dealers do perpetuate the idea of no trade in value on Hyundai owners then mark them WAY up.
Go onto the Honda site and compare the resale value of a CR-V to a Tucson, which is Hyundai's latest greatest quality product offering. Anyone can see that the Tucson has 3% worse resale value than a CR-V. Now think of what that rate will be like when all the other new Hyundais come out. If all the vehicles are great, it will hold up the brand as a whole, and it is possible for their entire range to see better rates of residual value with the effect of synergy.
The prices yo mentioned are retail asking prices. Which means that trade in values are about $3000 lower. For someone to buy a car for $13,000 and only get $7,000 after 3 years/36,000 miles is a pity.
I bought my 2002 Si for $14,500 brand new. Last Thursday, I went to see what I can get for it on trade-in for a CR-V. I was given $12,500 as trade in allowance. I'd say NOT BAD!!!
That is indeed phenomenal, but how did you get one for that cheap? I imagine the average person would have paid $3,000 or $4,000 more than what you paid for it. Going from 18k to 12.5k would not be that great.
The 2002 was not a very good year for the Si. Honda imported about 15,000 of them and only sold12,000. By January of 2003, dealers were giving them away. The car I bought was advertized in the paper for $15,000, I walked in and offered $14,500, they took it. I got 1.9% APR on top of that as well. There are people on the Si board who have gotten theirs for as low as $13,800. Some dealers were stubborn and did not want to negotiate, they probably still have the 2002's with 0 miles in the back lot.
Since Honda does not offer rebates, but rather dealer incentives, these don't affect resale values as much.
The salesman wants my car for his personal vehicle. I only have 15,000 miles on it, and it is in an immaculate condition. No dents, no dings, never been hit, nice coat of wax, clean interior... and it's black, the color he wants. I have upgraded the brakes (Honda's weak point) to Brembo Rotors and EBC green stuff pads ($120 alltogether). The lowest the dealership would sell him the new Si is $16,000 with his employee discount.
Problem is the price of the CR-V, I know there is a dealer incentive, as some people have gotten theirs for $500 under invoice, but this dealer does not want to go bellow $200 over the invoice. I am pretty sure I can grind them down. I have nothing to lose, I have a car, they need to sell theirs. They know I am the only person who have showed interest in their 5 spd manual CR-V, they have to sell it to me. If not, they will have it on the lot for a long time.
There are "I want" and "I need," I already have what I need, CR-V is something I want, but can live without.
CR just reviewed the Civic EX and Elantra GT. Both had plusses and minuses in CR's view, but overall CR rated the Elantra just a bit higher overall than the Elantra. The main plusses for the Civic were engine, fit and finish, fuel economy, controls and displays, and reliability. Main plusses for the Elantra were quietness, ride, warranty, and controls and displays. CR also praised the Elantra's "nicely finished interior." So with both cars pretty close, buyers can decide based on which car fits their needs--and budget--better.
It's interesting to note also that sales of the Civic are down in 2005 compared to 2004.
Even if the Civic has, for example, 10% better resale value, you will probably end up having that absorbed by any repairs that may come up along the way.
I'm a college student, and I work at a Chinese food restaurant that delivers everywhere in the Eugene-Springfield, Oregon metro area, the webstie is kowloons.com. In 2001, the owner bought 5 Civic DX sedans with automatics. They had 8 delivery vehicles. The vehicles got 180,000 miles on them by 2004, when they were sold. They were, this sounds odd enough, serviced by Mercedes-Benz of Eugene for all the routine maintenance which is coincidentally next door... So now only 1 of those original 5 cars is left. Why? Each of the four had to have their auto transmissions replaced every 60,000 miles. The one that is left has only had it replaced twice, so the owner hasn't gotten rid of it yet. He stil buys Honda, now we have 2004 Civic VP coupes with manuals, but he will never get autos again.
Every 60k is pretty bad... If you are thinking about a Civic or an Elantra, and you have to get an auto, all things aside, I'd get a 'Lantra. Unless you plan on having it only a year or two.
Good position for negotiations, but a CR-V? A practical, quality vehicle, but don't go getting old on me, dude. I like reading your technical input on the SI forum.
Also interesting that your dealership handles both makes. There was a thread earlier about Honda offering better service because the dealers carry only Hondas. In your dealer's case, offering multiple makes hasn't seemed to dilute the customer service.
Has anyone ever noticed how horrendous the seats in the Civics are? My god, whenever I have to drive one they make my back hurt like no other for hours on end after I'm done driving. I know it's not me, because my father and brother both have Civics and they are always complaining? Civic owners: don't you get tired of the seats? MESSAGE TO HONDA: Americans need lumbar support!
The car is rock solid. You can't do anything to break it. But Honda's ergonomics are poor. Look at the dash mounted shifter in the SI. It ignores some of the most basic ergomomic principles. Although it is closer to the wheel, it is higher than the standard shifter. Therefore, when driving and keeping one hand on the shift and one on the wheel (like most people do when they shift a lot), you have to keep your shoulders elevated instead of a lower, more comfortable position. Look how far you have to reach for the radio. Look at how the wheel well interferes with your foot position on the clutch. I could continue.
Also, I think it is quite comical that you bring up the ergonomics. Honda is always hailed as the leader in ergonomics, but I don't see why anymore. Take for example the HVAC knobs. They are right by the radio knobs, and maybe it is just me, but almost everytime I reach to turn up the radio I turn the heat on! It drives me insane that after driving these cars all the time, for some reason, the design I just can't get used to. Another ergonomical anomoly is the location of the cup holders. While the Elantra's aren't the best in the industry, I think the Civic's are the worst. In front of the shifter? C'mon! That seems not only un-natural to me, but dangerous. On many occasions, I have seen people accidentally knock their shifters into the wrong gears or out of gear, and it doesn't matter if it is a manual or automatic. Also, has anyone noticed that the B-pillar (I actually don't know the name of the pillar, but I think that is it, the one next to the windshield on the left) is TOO THICK and whenever you are going around left turns you have to constantly bob your head to make sure you're not going to run over a little kid?!
However annoying those problems are, i still think the seat one is the worst, as it is the most easily fixable.
I read once that the Elantra's seat is actually quite expensive to make. It uses firm cushioning ala Porsche and Volvo that feels hard when you first sit on it but is great for extended trips. Hyundai is one of the few companies that puts dual seat height adjusters on its entire lineup, from the lowly Accent on up. It's one of the reasons I went for the Elantra vs. the Civic.
Good position for negotiations, but a CR-V? A practical, quality vehicle, but don't go getting old on me, dude. I like reading your technical input on the SI forum.
I am getting old, I am going to be 30 this summer !!!! I gave the CR-V to my girlfriend, and working on getting a 6 spd TSX.
If it is, then what does that make someone approaching 50????????????????
Honda's problem is you've got to move up to a higher trim level on the Civic to equal the standard features already available on the base Hyundai Elantra and that forces your to spend thousands more. You just can't make up that $3-4K higher purchase price and additional intrest with a higher resale value.