Is There Room in the Luxury Market for Hyundai?

fintail

Well, if MSN says it...

I wonder how many real world shoppers have those three on their list.

bobad

Another example of Genesis being viewed and accepted as a luxury vehicle.

The evidence is all over the place if one only believes their own senses. The best evidence of all it to take one for a drive.

backy

I wonder how many real world shoppers have those three on their list.

Exactly! Hasn't it been said here how important exclusivity is in the luxury market?

toye

We know that some on this blog will never be caught or admit on test driving a Genesis! :P

smarty666

I don't give a rats behind what MSN says. Listen, I have said time and time again, I think that the Genesis is a legitimate luxury car. I did not get it for various reasons but I can see why it appeals to a lot of people. If offers a lot of luxury features for a hell of a lot less than any of the luxury companies do and for many middle class American's who can't afford the big name V8/RWD BMW, Audi, MB, Infiniti, or Lexus, the Genesis offers the possibility of getting those things when normally they could only dream of it.

Time and time again, I have consistently mistaken the Genesis for a Infiniti, BMW, MB, and even Lexus on numerous occasions. Personally, I don't care if people think its luxury or not, determining what is luxury is highly subjective, but for me and many other to mistake it for all those different luxury cars says something about its luxury look and definitely suggests it has one. You can call Hyundai a copy cat if you want but at least it got people, even myself, have a eyebrow raise and began looking at their products when normally we never would have before. I'd call that smart marketing on Hyundai's part.

toye

I too don't care what MSN says as well BUT as an example of the perception of the Genesis being compared to other luxury automobiles that cost far more. The Genesis has come a long way in the two years its been on the market. We are just begining to see the impact it has been on Hyundai and the rest of the auto makers.

captain2

but captain2 said that price is no object for cars like this. So a measly $15-20k difference won't really be a difference
yes I did - would suggest to you that smarty666 in this case is NOT a typical luxury car buyer - more typically an upscale sedan buyer - which is what the Genesis is. I sincerely doubt that many 550/E550 buyers would even give the Gen sedan a look, those folks want something in a car quite different than what the Hyundai product offers - and only part of that difference has to do with the cars themselves.
As smarty does point out it only makes sense that they might sell more $40k upscale sedans than (usually luxury) $60k ones. When properly compared to other $40k sedans though, Gen sedan sales are unremarkable.

backy

I sincerely doubt that many 550/E550 buyers would even give the Gen sedan a look...

Apparently the folks at MSN Autos believe SOME 550/E550 buyers will give the Genesis a look. It's also clear they don't have any problem comparing a "Hyundai" to a BMW and MB. IMO, their opinion in this matter is more credible than yours, since I have no reason to believe they have a huge anti-Hyundai chip on their shoulders.

BTW, there are very few "$40k" upscale sedans sold. Most "upscale sedans" sell for far less than $40k, especially after the inevitable discounts--including the Avalons, Maximas, and Taurii that you have mentioned. So how about we compare the sales of over-$40k "upscale sedans" to those of the Genesis?

tjc78

acdii

So how about we compare the sales of over-$40k "upscale sedans" to those of the Genesis?

Good point. Compare a Lincoln MKZ, Town Car, and MKS, all three are luxury models starting in the same price ranges as the Genesis. Compare against the Cadillac lineup too. Both are still considered Luxury whether anyone cares to admit it or not. Unfortunately, only the Lincoln Towncar, which sadly goes away in 2012, is the only RWD model to compare it to properly for drivetrain.

bobad

Personally, I don't care if people think its luxury or not, determining what is luxury is highly subjective, but for me and many other to mistake it for all those different luxury cars says something about its luxury look and definitely suggests it has one.

I'm beginning to think a luxury car is a car you will never own. Once you own it, it no longer seems like a luxury.

The Corolla owner thinks the Camry is a luxury, the Camry owner thinks the Avalon is a luxury, the Avalon owner thinks the Lexus is a luxury. But if you ask most Lexus owners, they don't think they're driving a snooty, expensive luxury car at all. So driving a luxury car is almost an unattainable goal, just like driving a new car. (once you buy a new car, it isn't new anymore, is it?)

But I know what you mean about MSN and their parent company. I wouldn't give you a nickel for their collective opinion.

fintail

Interesting cgi....but if that existed, it would be GIGANTIC! And extremely tall, maybe the most headroom of any car in production. It would no doubt tower over the undisputed leader of the mass market luxobarge coupe, the CL.

fintail

Isn't the source of the perception worth something? Is there a link to this writeup? Is it attributed to an author, who can then be examined? Perception counts for a lot, and MSN has little cred in the automotive world. Could someone who usually makes their trite top 10 lists be writing car reviews, and have a different perception than actual enthusiasts? For instance, when I visit my mother and spot a new car, I will ask her what she thinks it is. She thought the Infiniti M was a Buick and that the xB was Russian. Perception...

What specific impact has the Genesis had on other makers? Other than reinforcing to Lexus that nobody knows the GS exists and even if they did, few would want to pay for it.

It's a fine car in and of itself, but let's not get ahead of ourselves.

tjc78

Interesting cgi

Yes, I thought it was interesting, Would it be luxury though ...

fintail

It would be a personal luxury coupe of sorts. It also appears to be a hardtop in those images...which is always cool.

captain2

Most "upscale sedans" sell for far less than $40k
INCLUDING the Gen Sedan. FYI the Gen 3.8, and the comparable Avs/Maxs and even top line Tauri all have MSRPs of about $33k - and nor can Hyundai, Toyota, Nissan or Ford even make one - branded (and sold) as such.

backy

What specific impact has the Genesis had on other makers?

Other than lost sales, and downward pressure on prices?

backy

A base no-options Genesis sedan lists for $33k. Almost all of them have options. Then there's the 4.6s that go for over $40k. Anyway, you are the one who brought up the $40k number. Backtracking (again), I see.

The Genesis does go for over $40k. Tarted-up FWD sedans like the Avalon, Maxima, and Taurus seldom get that high.

fintail

What lost sales and downward price pressure?

backy

You are denying that no other car company has lost a sale to the Genesis since it came out? And that the Genesis' low-for-the-class pricing does not exert downward pressure on competitors' prices, as Hyundai has done for many years with its other offerings?

Okee doke.

bobad

Other than lost sales, and downward pressure on prices?

You forgot to mention more standard features.

tjc78

From another forum here on Edmunds. I believe this is exactly the point some are trying to make in here...

Click Here Post #53546!

toye

That type of mentality still exists but is diminishing

smarty666

It sad when you got Toyota fanboys who still think they are king of the crop but fail to realize that Ford, Nissan, Hyundai, and Honda have passed them in quality, handling, unique styling, reliability etc and offer just as good a brand image as Toyota has and more features then them.

If anything, for the immediate future, the brand image of Toyota and Lexus is going to be hurt due to the events of the last few months, regardless of sales numbers, is going to be tarnished as long as people remember the recalls and safety issues plaguing both Toyota and Lexus.

backy

I think this is the same kind of buyer (who doesn't test drive the car he/she buys, just relies on brand reputation) who posts angry complaints in Town Hall re how the car drives, e.g. the Corolla "wandering all over the road" because of its EPS. When I buy an appliance for my home, I do go by brand reputation to some degree--backed by professional reviews. I don't take the appliance home to test-drive it. But then, those "appliances" cost only $300-500, except for the fridge which is a once-every-15-year investment. The car appliances cost a lot more.

I wonder if the recent troubles at Toyota will cause some die-hard car brand loyalists (especially for Toyota/Lexus) to rethink their blind loyalty. A warning from a leading consumer magazine to not buy one of those Lexus models, plus all the recalls and reports on Toyota's delays in reporting safety issues, can't help build confidence in the brand.

fintail

Oh, I am sure some sales have been lost, but enough to make a market impact? From what I can see, the Gen competes most with the M and GS...the former of which is/was at the end of a model run anyway, and the latter which never sold well to begin with. Can you name models which have been impacted by the Gen, in sales or price? I haven't seen any upmarket cars being harmed, but I might have missed a stat.

backy

From what I can see, the Gen competes most with the M and GS...

I agree, at least wrt Nissan/Infiniti and Toyota/Lexus.

Can you name models which have been impacted by the Gen, in sales or price?

Let's look at the two models the Genesis competes most with, in your view...

Annual US Sales: 2007 / 2008 / 2009

Infiniti M: 21,884 / 15,618 / 8,501
Lexus GS: 23,381 / 15,759 / 7,430
Genesis: 0 / 6,167 / 21,889

Two notes: first, the Genesis started selling in volume in the US in 3Q08. Second, at some point in 2009 the Genesis sales figures started including the coupe.

I find those figures interesting. Note that the GS actually outsold the M as recently as 2008, and sold 23k units in 2007, so to say the GS never sold well is inaccurate I think. Also, in 2008 the GS was only in its 3rd model year in the US... not exactly an old design. And the M got a refresh for the 2008 MY. Yet sales started tanking for both in 2008, just as the Genesis arrived on the scene, then really went south in 2009. I am sure much of that was due to the recession. Yet buyers interested in that kind of car (RWD luxury sedan, V6 or V8, high quality etc.) had to get something. I assert that in many cases, that something was the Genesis.

fintail

Well, I still don't see it competing much with the Euros, no matter the opinions of MSN :shades: ...those two are the majority of the highline conquests IMHO.

It looks pretty simple to me...Genesis comes around, M and GS decline. M was at least once a favorite in the highline Hertz fleet too...I bet that added several thousand to the sales volume, but I don't know if it is bought anymore. GS has mostly been unloved and I am shocked at those 07 numbers. The Genesis had to be tempting compared to the aging M and boring GS.

j2j

"exactly the point, the Phaeton was a failure BECAUSE in the somewhat foggy land of brand perceptions the carbuyers were NOT going to pay that kind of money for something with a VW badge - regardless of the fact that the Phaeton was every bit a competitor - and in some ways better than the undeniably lux class A8. AND it even had an approprately high price tag. So the Phaeton made (makes) the lux cut in terms of what the car was and is on a spec sheet but fails miserably because it is labelled as a VW. And the difference between this and the Hyundai Gen/Equus is what?"

******

Thousands less in MSRP and a design style that doesn't look like a larger Sonata (unlike the Phaeton which looks like a larger Passat).

The Phaeton may have been a failure due to those factors, but it nonetheless is a luxury sedan (and a luxury F segment at that) - as you even admit.

So still haven't addressed how the Lexus LS is a luxury vehicle here (as was the Infiniti Q) while the same models in Japan were/are (under your "argument") not luxury vehicles.

j2j

"No not really, all I'm saying is that Hyundai can't be Hyundai, and nor can Hyundai sell all ends of the market at the same time - AS HYUNDAI. THIS NOT CRITICISM of Hyundai it is a condition of what the luxuy market is - and isn't. Furthermore, all those brands you mention in this post - would not find any 'room' either - all for pretty much the same reasons."

*****
Why not?

Mercedes and Toyota do that in Germany and Japan, respectively.

And even here in the US, mainstream Chevy and Nissan sell near exotic level sports cars (the Corvette and GT-R).

Along those lines, Lexus and Audi are mainstream luxury brand and Acura, arguably, an entry-level luxury brand - and yet, they offer (or have offered) models such as the LFA, R8 and NSX - models which are in the exotic/supercar category at much higher pricepoints than their regular lineups.

j2j

"It says nothing about the Genesis competing successfully as a luxury car because that is NOT how it's competing. Very hard to compete as a luxury car when it isn't one! I would further suggest that Genesis sales still pale in comparison to those Avalon/Maxima/Taurus sales which is the Gen's true competition - aka $40k upscale sedans."

******

Following your "argument" - then the LS400 must not have been a true executive, luxury sedan either, since its original MSRP was $35K, which not only undercut the S Class, but most E Class trims as well.

The LS400 was actually closer in price to the top of the line C Class than the top of the line E Class.

And remember, at that time - Lexus had no brand perception/image (hence the heavy discounting, even more so than the Genesis or the Equus).

tjc78

Along those lines, Lexus and Audi are mainstream luxury brand and Acura, arguably, an entry-level luxury brand -

How many classifications are we going to have?? IMO there are mainstream brands and luxury brands. There really isn't any reason to start creating several tiers of luxury. It's quite simple, luxury brands can make some entry level cars (think TSX / A4 / 1series) and mainstream brands can make some luxurious cars (think Genesis, Avalon, LaCrosse).

tjc78

I think this is the same kind of buyer (who doesn't test drive the car he/she buys, just relies on brand reputation) who posts angry complaints in Town Hall re how the car drives,

That wasn't my point of linking the post. The point that a poster who hasn't shown up in this thread (that I know of) is talking about the same thing some of us say. Hyundai simply doesn't have the brand perception YET to make luxury anything. As fine and luxurious the Genesis and soon to be Equus are, they are still going to be in some people's eyes a lowly Hyundai.

Quick story, recently while at my GF's parents house a guest (who doesn't know alot about cars) asked me "how I liked my Honda, its really pretty" I said its a Hyundai Genesis...... blank stare, he actually thought I was kidding. He said "no way, Hyundai makes junk" This is not the first time, heck its happened multiple times over the year of ownership.

lemko

Deal Brings Hyundai Cars and Jobs to South Philly

toye

You hit it on the nail.....Everyday people are waking up to the fact that Hyundai is not the same automaker that makes "junk" Which in turns changes people's perception. This done by word of mouth, auto reviews, articles, and drive-bys etc. Everyday there are less skeptics.

-Drive-bys as in driving by a Hyundai dealership or a new Hyundai driving by-

tjc78

Some much needed jobs, very nice. I guess these are the lots you can see when drving over the Walt Whitman? I remember years back there were always tons of cars there.

tjc78

Which in turns changes people's perception

Just remember that this takes time. The fall of the big 3 didn't happen overnight and Toyota/Honda's rise didn't either. I think Hyundai is at least 3-5 years away from having an iron clad "good" reputation. This, of course, barring a huge recall or sudden reliabillity problems. If and when this happens, take the Genesis, Equus and whatever else and start with some new "Luxury" dealers. There are plenty of Saturn/Hummer and Pontiac buildings available.

toye

We are in the age of instant communication. You don't have just 1 newspaper, monthly mags, 3 TV networks, a handful of radio stations, The internet has changed everything. Just as fast as Hyundai's perception is changing for the better it could do just the opposite. Look at Toyota they are being bombarded with negative publicity daily, on Internet, TV etc. Good thing for Toyota they started on top where Hyundai came from the bottom.

acdii

Does that mean my $56,000 F350 is a Luxury vehicle? Sweet! :shades:

toye

I also read an article recently that stated 5 years ago Hyundai was prepping "Genesis" as their stand a lone luxury division but estimated that in order to do that it would have to add $5000 per vehicle to cover costs etc. To keep costs down they decided to make Genesis a nameplate instead and pass the savings on to the consumer.

backy

If people insist on burying their heads in the past, not keeping up with what has happened in the automotive market over the past decade, and want to spend their money on a car just because of its brand name and don't want to bother their brains, or egos, to even check out other options... best of luck to them. But there's plenty of people out there who do pay attention to what is going on in the automotive world, do their research, and are open-minded enough to look beyond the same-old choices. That is the market Hyundai is targeting.

As to whether Hyundai doesn't have the brand perception to make a luxury anything, that is where we will have to disagree. I think it is clear that Hyundai is making luxury cars TODAY. I simply don't see what else the Genesis sedan and the Equus can be considered other than luxury vehicles, based on the cars themselves. What Hyundai is not is a luxury brand. I separate the two. Some people do not. I would have no problem buying a luxury vehicle from a non-luxury brand. Some people have a big problem with that. So be it. I don't lose sleep over it.

tjc78

That is the market Hyundai is targeting

I can't believe that. What percentage of the population follows the auto industry like us fine Edmunds' posters?

What Hyundai is not is a luxury brand.

Correct.

I separate the two. Some people do not.

I don't. The whole thing about luxury is the total package. Its the car, the service, the dealership experience, and unfortunately the badge. If someone sees you pull up in an ES350 or a Genesis, which one does the majority of the population think is a:) more expensive and/or b: more luxurious? That is what a luxury name and image suggest.

smarty666

I tend to agree with you backy about the Genesis and Equus but everyones definition of luxury is different. Many consider it by brand and that only BMW, Mercedes, and Lexus are true luxury vehicles and anything else is crap, while to me luxury is determined by a variety of factors such as the company name, the price point, material quality level, level of customer service/dealership experience as determination of luxury or not.

For me, I don't quiver over entry-level luxury vs luxury sedan vs what brand it is and whether they have V8's or not. I consider anything from BMW, Mercedes, Audi, Acura, Infiniti, Lexus, and Cadillac to be luxury vehicles along with the Genesis and Equus. I know that others do not feel that way but I do as do many others. Its highly subjective of course but I don't really care.

By the way, I know that I left out things like Porsche, Lamborghini, Bentley, etc even those they are high end luxury vehicles but I usually don't talk about them because the majority of American's can't afford those vehicles.

bobad

If someone sees you pull up in an ES350 or a Genesis, which one does the majority of the population think is a:) more expensive and/or b: more luxurious?

I'm trying to imagine what you're getting at, but I'm not quite sure. I think you're saying "The public judge your worth by the car you drive".

I certainly don't, unless it's smoking and falling apart. I don't think the majority of people do either. I'll bet half my friends and acquaintances couldn't accurately name the vehicles I drive, and I can't name most of theirs. Unless they drive something really far on the edge, it doesn't affect the way I think of them at all.

stever

Wow Lemko, does this mean you're going to buy your girlfriend wife a Genesis now?

tjc78

I'm trying to imagine what you're getting at, but I'm not quite sure. I think you're saying "The public judge your worth by the car you drive".

What I am trying to say in a nutshell is that the majority of non car-obsessed people will think that the Lexus/Merc/BMW/Caddy etc are more luxurious/expensive and that matters to most people in this category of vehicle. The "badge" is as important as the actual car to some people.

I know I have used this example before... A woman at work recently bought a C-class Mercedes (no nav, probably vinyl interior) and people were like "must be nice" "so and so got a Mercedes", etc. Now OTOH that car probably cost no more than my Genesis or the loaded up Highlander in the parking lot. However, the non car people think its "special".

Now when someone can look at a Hyundai (any Hyundai) like that, then there is room.....

captain2

The whole thing about luxury is the total package. Its the car, the service, the dealership experience, and unfortunately the badge
EXACTLY

backy

What percentage of the population follows the auto industry like us fine Edmunds' posters?

Hyundai's market is much bigger than that. Recall I talked about people who are open-minded enough to look beyond the same-old brands. They don't necessarily have to post at Edmunds.com or pour over auto industry reports. Do you think maybe there's quite a few Toyota owners who are considering looking outside of Toyota for their next vehicle, for example?

If someone sees you pull up in an ES350 or a Genesis, which one does the majority of the population think is a:) more expensive and/or b: more luxurious?

Uh... tell me WHY I care what that person who sees me pull up in my car thinks? :confuse:

backy

Now when someone can look at a Hyundai (any Hyundai) like that, then there is room.....

Do you ever go to auto shows? Have you seen the public's reaction to the Genesis? In the past three Twin Cities auto shows, I noticed many people oohing and ahhing over the Genesis--and in the last auto show, the Equus. They seemed to think the cars were pretty "special."

So I guess there IS room.

captain2

So still haven't addressed how the Lexus LS is a luxury vehicle here (as was the Infiniti Q) while the same models in Japan were/are (under your "argument") not luxury vehicles.
Most definitely did, how a particular Toyota branded model and/or a particular Nissan branded model are perceived OVERSEAS has nothing to do with the Badge-conscious AMERICAN consumer. You see, it's all about what's in a name IN THIS COUNTRY, and less to do with the cars themselves.