Is There Room in the Luxury Market for Hyundai?

louiswei

To answer this question in simple terms:

NO for Hyundai as a brand.

YES for Hyundai as a company.

ateixeira

I think that changes as the population ages.

The Mercedes C-class had lots of electrical problems, so young people that were supposed to be drawn in to the brand may not go back for a 2nd look.

Hyundai has to aim for those same younger folks, IMHO.

bobad

To answer this question in simple terms:

NO for Hyundai as a brand.

YES for Hyundai as a company.

You didn't say anything about the only thing that really matters, the car. How about the car? :confuse:

joe97

Hyundai will pitch the Genesis in variation of ads during the Super Bowl

prosource1

The Montgomery Advertiser is reporting that one of the 30-second ads, bought by Hyundai, will include a spot on the redesigned 2009 Sonata. This would make sense since Hyundai needs that plant running at capacity. The Sonata is receiving an entirely new (and very improved) interior, a revised suspension, upgrades to the 2.4 (to 175 hp) and the 3.3 (to 265 hp)liter engines, navi and subtle exterior changes. The Alabama paper is also reporting that Hyundai is gunning for the Accord and Camry. Hyundai's brand image is still not ready to take on the mid-sizers from Honda and Toyota yet. Yet.

joe97

You are talking about this article?

http://www.montgomeryadvertiser.com/apps/pbcs.dll/article?AID=/20080126/BUSINESS- - - /801260307/1003

Is the facelifted Sonata for certain at the Super Bowl? The article didn't actually point that out if I am reading it correctly:

The company isn't saying much about what is in the ads, but one can wonder if it will be either the Sonata or the Genesis.

Also, the article stated Hyundai is gunning the upcoming Sonata facelift against the Accord and Malibu, nothing on the Camry. FWIW, the upcoming issue of C&D will show the Sonata I-4 finishing ahead of the Camry I-4 in a battle of midsize I-4 sedans.

The 2009 Sonata will hit the scene in a little more than a week. Talking to the Hyundai marketing folks, they are looking to go head-to-head with the Accord and the Chevrolet Malibu.

backy

The Sonata is already at least as good as the Camry if not better IMO (except for V6 power), but the redux in 2009 will allow it to better compete with the Camry V6 and with the new Accord. And it looks like at least one professional review agrees with me.

bobad

Hyundai's brand image is still not ready to take on the mid-sizers from Honda and Toyota yet. Yet.

If Hyundai is not ready now, when will they be ready? Should Hyundai wait until their cars are 2x better and 1/2 the price of their Toyota and Honda counterparts before they announce their intentions to compete?

All kidding aside, I agree the "brand image" of Toyota and Honda are above Hyundai's. However, I think more and more people are wising up to the fact that brand image doesn't ride you to work.

ateixeira

Saw one at the DC auto show. Looks good in person, from a glance you might think it's an Infiniti M.

Seemed to draw a fair amount of attention, but not crowds. The G8 got more attention, for instance. The GT-R was mobbed. The GT500KR was also mobbed.

It's hard to get respect and attention, they'll have to earn it.

joe97

#1
http://www.hyundainews.com/Media_Kits/Video_Clips/Super_Bowl_Ad_1/Video_2604.asp-

#2
http://www.hyundainews.com/Media_Kits/Video_Clips/Super_Bowl_Ad_2/Video_2600.asp-

bobad

Thanks Joe!

Good message, good look at the car in the allotted 30sec. I have seen many car commercials that I had to ask someone if it was a car commercial, and for which make. There's no mistaking this one. Very classy and understated. My only possible complaint is they could have shown a glimpse of the interior, but I'm sure that's coming soon.

What's your opinion on the spots?

ateixeira

The first one is clever. Again they show they have a self-depricating sense of humor. At least vis-a-vis the old Hyundai image.

I don't like the 2nd one as much, for some reason. Commercials should not talk about commercials, and reactions to them. Save that for the follow-up.

Looks like the grille has no H on it but a Bentley-like set of wings above it. Anyone else notice that?

bumpy

Looks like the grille has no H on it but a Bentley-like set of wings above it.

That is the logo for the KDM Genesis (where the car is a not-quite-separate marque).

bobad

In other words, we may have got a look at the Korean version, right?

joe97

Both ads are subtle, yet has the confident tone delivering the right message for the product. I especially like when Jeff Bridges says "right about now, you are probably expecting some big twists or something, well, here it is (cues the Hyundai logo). Get it? Get the twist?

From a marketing standpoint (and of course product), the substance is there and those ads get the mark.

hjc1

Sorry I think my 8 year old Grandson could do a better job on these commercials.
What a waste of money
This is how Hyundai expects to reach the higher price buyer ??
not with these spots
I think I'll keep my Azera

lightfootfl

I personally think that most automobile buyers would rather have this type of commercial, rather than some pitchman screaming either at the buyer or some other person. When I look for a car, if the salesperson or the ads have to blast out at me I turn around and leave. What is wrong with speaking softly and making your point? If the dealership is playing loud obnoxious noise I won't even enter that place. I will however call the sales manager and/or owner and tell them about it. There are too many dealers willing to try pleasing their customers for me to waste my time with those that don't. How many ads have you ever seen for the true luxury cars where they use advertising that thinks their customers are either deaf or too stupid to look at the product ?

van

bumpy

Given the necessary lead time, they probably did use the KDM version to film the ads. That, and I think Hyundai is still not quite settled on the exact details for the US version.



Edit: yep, the car in the ads is the Korean version. Even has the same front nameplate.
http://www.worldcarfans.com/9071205.005/hyundai-genesis-revealed-in-korea

ateixeira

Keep in mind the "DUH" ads, and ask yourself if that's any better.

This is new ground for Hyundai.

bobad

Sorry I think my 8 year old Grandson could do a better job on these commercials.
What a waste of money
This is how Hyundai expects to reach the higher price buyer ??
not with these spots
I think I'll keep my Azera

Well sorry there was no salesman wearing a cowboy hat slapping on the hood. To each his own.

Since the car will debut this summer, I don't think the entire Genesis ad campaign should be judged by a couple of 30 second spots in February.

Regardless of the commercials,the Azera isn't in the same ball park with the Genesis.

bobad

Dec. 07 midsize sedan sales:

Camry 38K
Accord 31K
Altima 25K
Sonata 24K

Looks like the gap is closing. December Sonata sales was 292 units short of the Altima.

backy

That is an impressive number, considering it represents about 150% of the monthly Sonata output from the Alabama plant (they make the Santa Fe also). So Hyundai must have cleared out some backlog in December. And it was up against the all-new Accord and Altima and a Camry with big incentives on it. Surprising to me though that the Camry outsold the Accord by such a large margin.

ateixeira

I heard someone mention they upped incentives for the month, so some of the growth may be artificial.

Any how, good numbers, but the Genesis can't survive on big rebates since it'll already be priced with lower profit margins per car.

backy

What is the profit margin on the Genesis vs. the Sonata? I thought that luxury cars typically have higher profit margins than do "family" cars.

mpuzach

One can't help but wonder what will happen to Sonata sales once they release the 2009 model. Fome the pictures I've seen, it looks to be nicely upgraded and beautifully executed.

ateixeira

Good point, I was thinking more in terms of compared to other V8 RWD luxury sedans. They're selling them for $10 or $20 grand less, so it may be a challenge.

Though you're right, Sonatas sell for peanuts. I wonder if they can sustain those prices. Even Elantras - I saw one at Fitzmall the other day for $10,999, brand new. That includes freight!

Not sure how they can profit at all.

backy

I think I saw that Elantra on the Fitzmall web site too. I noticed there was only one at that price--white, no options (not even A/C).

I've followed Hyundai for several years now and have noticed that over the past 8 years, their prices have come up quite a bit. For example, less than 4 years ago I bought a fully-loaded, top-end Elantra for $13,200 + T&L. No way you can approach that number now--the MSRP on a car like that is near $20k. Similarly, the MSRP now on the Sonata Limited V6 is over $25k, and gets close to $30k for the V6 with nav. So even with incentives, the prices of Hyundais are jumping up.

Just a couple of years ago, Hyundai had no vehicles that could list for over $30k. Soon they'll have five: Azera, Entourage, Santa Fe, Veracruz, and now the Genesis (and maybe the top-end Genesis coupe also).

bobad

Not sure how they can profit at all.

Don't feel sorry for Hyundai. Even at "rock bottom" prices, they are making a handsome profit, because modern manufacturing plants are so efficient (and they aren't burdened with huge employee benefit packages like Japan and USA big 3)

I bet it costs the same or less to manufacture a Camry than a Sonata, so Toyota is really cleaning up.

Sure, the cost of manufacturing the Genesis will be high for the first year or 2, but if the car sells well, Hyundai will eventually make good profits on it at $30-40K.

mpuzach

"Similarly, the MSRP now on the Sonata Limited V6 is over $25k, and gets close to $30k for the V6 with nav."

Am I missing something here? I can't come up with a way to get a Sonata over $26,420. That includes every option shown for a Limited V6. Also, unless I'm completely bonkers navigation is not available on the Sonata.

backy

I was referring to the 2009 Sonata, which will be out shortly. The I4 Limited is just under $25k w/o nav, so that should put the V6 with nav around $28k.

mpuzach

Where are you getting info on the 2009 Sonata?

jaxs1

2009 Sonata with navigation:

backy

It's all over the Web, including here in Town Hall, and also C/D did a comparo of the 2009 Sonata against some other mid-sizers in their March issue.

stever

Well sorry there was no salesman wearing a cowboy hat slapping on the hood. To each his own.

hehe, go see Cal?

(for those who have missed all the fun over the years, Cal Worthington)

iluvmysephia1

Spot! His ads peppered Seattle's TV waves for years.

mpuzach

That 2009 Sonata interior looks pretty nice. Any word on when it will be going on sale?

bobad

hehe, go see Cal?

Steve, I live in the deep South, but I've heard of Cal somewhere. I think I may have seen a couple of his spots on a "Funniest TV Commercial" show.

I sure would like to see a full screen shot of the 09 Sonata interior. It doesn't appear to give anything away to the competition.

stever

I moved from the Deep South to Anchorage back in '80 and Cal has a Ford dealer there with the same kind of ads he shows in Seattle and for his dealerships in Southern California.

If you are old enough to have watched Johnny Carson, the car salesman character was all Cal.

prosource1

.....And Hyundai will also be selling an SE with a tuned suspension....which should address C&D's complaint that the Ltd. they tested was not as agile as the best-handling Altima or well-handling Accord. Having driven Altima(07) and Sonata(06,07) rentals many times, I concur. The Hyundai is scary good though.

stever

Hyundai's upscale push (Straightline)

ateixeira

No A/C? Wow, that's exactly the type of practice they will have to drop if they have any hopes at all of moving their image upscale.

The thing about the Genesis is that by having a $40,000 sedan, suddenly a Sonata for $28k doesn't seem expensive any more.

Genesis will be their halo car.

backy

Yeah, I guess you're right. In the meantime, Honda will need to fix that issue with their Civic, which doesn't offer A/C with the base model, in order to move their image upscale.

I agree on the Genesis being the halo car. I think that is why Hyundai is selling it under the Hyundai umbrella vs. creating a new brand--move the entire brand upscale.

ateixeira

That's one thing I like about Subaru - no unrealistically de-contented models for sale.

Those $10999 examples are called ad cars - then the dealers bait and switch. :sick:

backy

In places like Minnesota, a car w/o AC is actually a viable option, say for a kid who's getting his/her first car. But I don't think you'll find many w/o the optional AC. I don't think offering a few Accents and Elantras w/o AC will hurt Hyundai's brand image too much though--it hasn't hurt Honda's over the years.

ateixeira

Don't you need it to defog the windows on a rainy day?

Even in college, for my first new car my pre-requisites included A/C and a cassette player.

Funny, to think a cassette player was actually an upgrade back then!

iluvmysephia1

would take care of all basic window defogging needs, and even everyone's basic "stripper" model will have these installed from the get-go.

A/C is a "step-up" in price usually at least. I remember fondly my wife and I getting a "factory" A/C put in our '01 Kia Sportage 4X4 (a year and a half after purchase time) just before we moved from Washington state to Missouri in the spring of 2003. Cost us $1550.00, which included labor and sales tax. :sick:

We would've been up the creek without a paddle, though, without it, because y'all know the Midwest's heat and humidity, don't'cha? Absolutely had to have it and I must say, the Sportage 4X4 air conditioning unit handled the job soundly as a pound.

backy

I didn't own a car with AC until I moved to Houston in '82--that's 10 years of driving--and I managed just fine. But now that I have to do stuff like wear a suit to see customers during the day, I wouldn't want to be without AC.

My first car didn't have a cassette player. It didn't have any radio at all. It didn't have carpets. For my next car, I "graduated" to an AM radio!!

lemko

...I have seen the Genesis in person at the Philadelphia Auto Show and it doesn't look as impressive as it has in photos. It's actually a smaller car than I imagined and not much more upscale looking than the Azera. This car may have looked impressive in 1999, but it has a "been there, done that, bought the T-shirt" look to it today. Didn't say it was a BAD car, it just doesn't have anything anybody else's car doesn't have.

ateixeira

Kids are spoiled these days.

Actually, I think most 16-24 year old buy used cars anyway. Or hand-me downs from the parents.

I guess a few kids from Minnesota will buy those $11k Hyundais sans A/C.

louiswei

but it has a "been there, done that, bought the T-shirt" look to it today

Better than the Caddy DTS that's for sure...