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Is There Room in the Luxury Market for Hyundai?

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  • bobadbobad Member Posts: 1,587
    But the problem you see is NOT the car, the problem is in the name 'Hyundai' and where you went to buy one - meaning the same place you buy those wonderful $10k Accents.

    I was rendered speachless by all the conjecture and red herrings.. Where to start?

    First, there are many people like myself that has owned a Hyundai (2006 Sonata) for 3 years. I think our experience made the Hyundai name just fine with us, and would have to any reasonable person. So quit trying to foist your personal impression of the Hyundai name on the rest of the world. Times change. Catch up!

    Yes, a Lexus IS a Toyota. If someone said the Cadillac or Corvette were not a GM, but its own brand, you would laugh. So let's not use a double standard.
  • fourteen14fourteen14 Member Posts: 85
    "I guess it is high price that becomes a primary determinant of 'exclusivity' but this is also only one component of what makes a 'luxury' car."

    Sooo, a Cobalt that sold for $100,000 would be a luxury car, but a $10,000 Corvette would not be!??! Perhaps the next Cadillac XLR-V will be a rebadged Cobalt!!
  • captain2captain2 Member Posts: 3,971
    Nooo, your Cobalt could cost $500k and still not be a 'luxury' car - as long as it is a Chevrolet. The Corvette is a interesting case because I believe that most folks think of a Corvette as a Corvette and not as a Chevy. A 'brand' in its own right if you will. In any case, though, it is a damn fine performance car - not a luxury car. Price might have a lot to do with exclusuvity but can have little to do with 'luxury' as I said
  • bobadbobad Member Posts: 1,587
    Nooo, your Cobalt could cost $500k and still not be a 'luxury' car - as long as it is a Chevrolet. The Corvette is a interesting case because I believe that most folks think of a Corvette as a Corvette and not as a Chevy. A 'brand' in its own right if you will. In any case, though, it is a damn fine performance car - not a luxury car. Price might have a lot to do with exclusuvity but can have little to do with 'luxury' as I said

    Just keep on making up your own rules as you go. :)
  • m4d_cowm4d_cow Member Posts: 1,491
    Well, it;s a bit hard to explain as my definition of luxury car is a car with certain ammount/level of quality, materials, comfort, performance, customer service, technology, and exclusivity to some degree. Price doesn't matter much imo (however its only logical taht the more luxurious a car is the more it costs).

    Let's take Lexus for example:

    Like the ES, I take it as an entry level of luxury car, as it lacks the right ammount of exclusive technologies (takes too many parts from Camry) and interior quality, not to mention the total lack of exclusivity. The same can be said of Acura TL and Infiniti G.

    The GS is the luxury car imo, it prevails in all necessary categories imo. The IS can still pass for a luxury car as well, but it's more of a performance biased luxury where the Infiniti and BMW brands roam.

    Complex? There are others with even more complicated criterias.
  • fourteen14fourteen14 Member Posts: 85
    " I believe that most folks think of a Corvette as a Corvette and not as a Chevy. A 'brand' in its own right if you will."

    That's what Hyundai wants! For people to look upon the Genesis as a fine luxurious car in spite of it's manufacturer's name or reputation. People seem to have no problem with buying a Ferrari even though it is manufactured by Fiat!! Or, not buy a Viper because the same company made the Neon!!
  • bobadbobad Member Posts: 1,587
    That's what Hyundai wants! For people to look upon the Genesis as a fine luxurious car in spite of it's manufacturer's name or reputation.

    I think Hyundai is trying to build up their reputation. They are trying to fast track it by building good cars under the Hyundai name, not doing the tricky badge thing that Toyota, Honda, and Nissan did.
  • captain2captain2 Member Posts: 3,971
    They are trying to fast track it by building good cars under the Hyundai name, not doing the tricky badge thing that Toyota, Honda, and Nissan did.
    While it makes sense that the Genesis could get to market quicker using existing 'Hyundai' infrastructure, I think it is still unclear whether this is the right approach - if Hyundai does want a place with other 'luxury' marques. The approach that the J3 used creating Acura, Infiniti, and Lexus is not terribly 'tricky' - just expensive and a bit more time consuming but this is also the approach that has been shown to work in that it creates 'distance' between the 'luxury' car and its more mundane cousins.
    Recent tries (marketing a premium' car with a less than premium badge
    at doing what Hyundai is attempting to do by both VW and Mazda have both failed.
  • bobadbobad Member Posts: 1,587
    Recent tries (marketing a premium' car with a less than premium badge
    at doing what Hyundai is attempting to do by both VW and Mazda have both failed.


    We know why VW failed, and it wasn't a "badge", but $$$. Why Mazda failed I don't really know, but I suspect a lack of advertising exposure.
  • captain2captain2 Member Posts: 3,971
    We know why VW failed, and it wasn't a "badge", but $$$.
    probably a combination, the Phaeton definitely too many dollars, but also competitive in content and price with the high end Euro sedans from the likes of BMW/MB/Audi. Was it too any dollars for what it was - perhaps not - was it too many dollars to wear a 'VW' label certainly. The Phaeton was (is) a helluva 'luxury' car by any reasonable definition - except for the badge - hence the parallel.

    Why Mazda failed I don't really know
    Mazda/Ford back in the early 90s had made a decision to try to duplicate what Honda/Toyota/Nissan had done with Acura/Lexus/Infiniti with the creation of a brand name to be called Amati. Mazda (and Ford) hurting a bit financially at the time, the Amati brand never got off the ground although the car intended to be the first Amati did - it became the Mazda Millenia - a fine car with Acura like specs (but less ambitious than the LS and the Q). As a Mazda, they were forced to reduce the car's price and even came out with cheaper versions of the car specifically intended to make it more marketable. Later as they found out, the world was just not ready to spend even $25-30k on a product with a Mazda label. The Millenia hung on for a few more years than the Phaeton but the point here is if Mazda couldn't make it amongst the luxury marques 10-15 years, why should Hyundai be any different?
  • bobadbobad Member Posts: 1,587
    The Millenia hung on for a few more years than the Phaeton but the point here is if Mazda couldn't make it amongst the luxury marques 10-15 years, why should Hyundai be any different?

    One thing we need to consider and understand is the owner base. Toyota and Honda had a huge owner base when their luxury brands were launched. They have done an excellent job of offering entry level cars, and offering their customer base progressions of nicer, bigger cars to grow into. VW didn't. Jumping from a Beetle or Passat to a Phaeton was a huge leap, and customers had to come mostly from defections. Mazda has never been a huge seller to begin with, so I suspect that's partly why their luxury offering failed.

    I really don't know if the customer base for the lesser Hyundai's are enough to give Genesis a substantial leg up. The recession certainly hasn't helped. If a lot of Elantra's, Sonatas, Santa Fe's and Vera Cruz's are out there with satisfied owners, I think the chances for Genesis being successful are greatly increased. Every single Sonata owner I have spoken to is at least excited about Genesis, and some are going to buy them when the timing is right. Me? My 06 Sonata is still performing flawlessly. If I NEEDED a Genesis sedan, I would certainly buy one with confidence. Not only is it the best bang for the buck, but it's a fine car even at Lexus, BMW, and MB prices. Look to the right and you will see Edmund's customer ratings for Hyundai's. They're overwhelmingly positive, and that's no accident.

    .
  • captain2captain2 Member Posts: 3,971
    One thing we need to consider and understand is the owner base. Toyota and Honda had a huge owner base when their luxury brands were launched
    What create 'huge' owner bases loyalties etc. . is an established quality rep that comes with time.
    If we are talking Honda and Toyota there is a major difference is the quality rep both manufacturers had when Acura and Lexus were launched. The fact that the Acura was made by Honda and the Lexus by Toyota was an asset not a liability. Not so with Hyundai. I'm not so sure that you can take a mfgr. really known for $10-15k cars, try to sell a 'luxury' model that postioned as an alternative to true luxo cars costing $50 or $60k and expect the car buyer to take it anymore seriously than what they did with VW. At least not as a 'Hyundai'.
    Hyundai has made some notable strides in the last few years, not only in the actual quality of their products, but also in shedding some of that nasty 'Korean car' rep - a bed they made for themselves. I don't think though that anybody will venture that Hyundai has anywhere close the brand reputation and loyalty that Honda and Toyota did back in the late 80s/early 90s. I would put Hyundai's brand rep, market penetration, and quality rep about on par with Mazda's when they tried to get into the luxury market back in the middle 90s And when they tried to do it, with a good car, marketed it as a Mazda, we know what happened.
    It took the Japanese 20 years or so to live down their sins of the 60s. Hyundai is arguably trying to do it in half of that time, and hasn't finished the job quite yet.
    The carbuyer I think has a long memory.
  • houdini1houdini1 Member Posts: 8,351
    The carbuyer I think has a long memory.

    January 2009 U.S auto sales:

    Hyundai up 14%

    Toyota down 32%

    Keep it up. You are batting "0". ;)

    2013 LX 570 2016 LS 460

  • joe97joe97 Member Posts: 2,248
    That assurance program Hyundai seemed to have started very well for the automaker, as it finished January as one of the only three automakers that actually experienced an increase in the month, and one of the other is also a S. Korean automaker, Kia.

    The Genesis continues to have another consistent month.
  • captain2captain2 Member Posts: 3,971
    Hyundai up 14%

    Toyota down 32%


    hmmm, now that's really tough to figure out - we must obviously have a mass exodus to Hyundai because now magically folks are out there buying them for their perceived quality OR maybe those manufacturers that sell vehicles on the cheaper end of the spectrum tend to do better when times are tough. Not to mention rather aggressive 'Assurance' programs.
    I know it's tough but use a bit of common sense :P
  • backybacky Member Posts: 18,949
    ... OR maybe those manufacturers that sell vehicles on the cheaper end of the spectrum tend to do better when times are tough.

    Ford is another automaker that sells vehicles in the same price ranges as Hyundai, from the Focus that starts at a bit more than $10k asking price, to the Fusion starting around $14k asking price, up to sedans and SUVs that cross $30k. (Ford has trucks also, of course.) How did Ford's sales last month compare to Hyundai's?
  • joe97joe97 Member Posts: 2,248
    Ford nameplate down 39.5%

    Ford Motor Company down 40.2%
  • joe97joe97 Member Posts: 2,248
    On the other hand, Toyota, Lexus, Scion down on every single model...

    :P
  • sandy25sandy25 Member Posts: 65
    "I think it is still unclear whether this is the right approach - if Hyundai does want a place with other 'luxury' marques."

    The "if" is key. At this time I don't think they are looking to compete with the luxury marques. Hyundai is smart enough to realize problem #1 is brand perception The Genesis is one more strategy (as is the unique warranty, signifcant product/quality improvements, new assuarnace program) to enhance Hyundai's imagery. Can you think of a mroe effective way to build' acceptanc for Hyundai's entire line than marketing the Genesis?...which provides an advertising showcase, showroom excitement, dealer pride, press excitment/major coverage...as well as added sales and revenue,

    I don't think this would have been achieved as well if they had launched as a separate divison.

    From what I have read ( I can't recall the specific numbers) 90% of Genesis buyers are coming from outside the existing Hyundai franchise and many from luxury brands.
  • bobadbobad Member Posts: 1,587
    hmmm, now that's really tough to figure out - we must obviously have a mass exodus to Hyundai because now magically folks are out there buying them for their perceived quality OR maybe those manufacturers

    @Captain,

    I admit there's no mass exodus because Toyota's quality is going down. (although it is trending downward)

    However, you need to admit that Hyundai's quality since 2006 is not even remotely related to their pre-2000 quality. What has Toyota done for us lately?

    @Sandy25,

    That's what I've been saying all along. Hyundai decided about 8 years ago they would either build Hyundai's reputation for making good cars, or get out of the car business. They're not playing any deceptive marketing games. Either Hyundai's badge stands for good cars or it doesn't. Just look at their products since 2006, and the results are quite evident.
  • houdini1houdini1 Member Posts: 8,351
    Sorry captain, but that was a rather lame feeble attempt. That all you got? ;)

    2013 LX 570 2016 LS 460

  • sandy25sandy25 Member Posts: 65
    "That's what I've been saying all along."

    Bobad, since we agree you must be as smart as I am. :) This thread has assumed, wrongly I believe, that Hyundai's goal for the Genesis was to compete with Lexus, MB, etc. That misses the big picture. The Genesis is a tool to build the HYUNDAI brand. If they wanted to build a Genesis brand I think they would have followed the obvious path of separate dealerships, etc, Nissan, Honda and Toyota have demonstrated this is the way to go. But that route would have not provided the halo effect and so was ruled out.
  • bobadbobad Member Posts: 1,587
    This thread has assumed, wrongly I believe, that Hyundai's goal for the Genesis was to compete with Lexus, MB, etc. That misses the big picture. The Genesis is a tool to build the HYUNDAI brand.

    Yes, it's obvious to me that is Hyundai's plan. They want to improve the quality and reputation of all their cars, not just 1 luxury model under a different name plate. The ultimate goal is to raise the Hyundai name to the same level as Toyota and Honda. I read statements from Hyundai's CEO back in 2005, and that's about what he said. The way he spoke I could tell he was dead serious. It gave me the confidence to buy my first Hyundai. Reading Edmund's Hyundai owner reviews, they're well on their way.
  • steverstever Guest Posts: 52,454
    Thanks for pointing this out. Makes a lot of sense and I haven't been thinking about that connection and brand benefit at all.
  • dean3927dean3927 Member Posts: 80
    Houdini, thanks for the telling statistic.

    Here are some interesting portions from the February 2009 issue of Motor Trend's "The 25 People Who Matter," on Hyundai and its Chairman:

    "This hands-on chairman pushed Hyundai/Kia past Honda motor to become the world's fifth-largest automaker...."

    "Hyundai is a rare bright spot in the current automotive environment."

    BTW, I am in the financial industry, and it is the high-end, high-ticket item business that is least hit in a down market, not the lower-end. Captain2's statement otherwise is simply incorrect.
  • lemkolemko Member Posts: 15,261
    Yeah, but what happens if you lose your job or become disabled the SECOND year of ownership? I'd think it would be an excellent plan if it covered the whole time you financed the car. Of course, Hyundai would stand to lose a whole lotta money under those circumstances.
  • backybacky Member Posts: 18,949
    There is an option (I am sure at a cost) to extend the Assurance plan beyond the first year. But consider that most pundits are saying we'll be pulling out of the recession within the next year, so that is a critical time wrt the risk of losing one's income.
  • ateixeiraateixeira Member Posts: 72,587
    Good point.

    Let's not forget Nissan's extremely successful ad campaign that mimicked Lexus by putting the Altima on a dyno with all those champagne glasses, and called it affordable luxury.

    Noone thought the Altima was a luxury car, but it got people's attention.

    Altima sales skyrocketed that year. That marketing made the car relevant, because the previous generation simply wasn't on anyone's radar screen.

    In the same way, Genesis doesn't have to compete with the Lexus LS. They just want to provoke your attention (it works even if it makes you angry, by the way).

    In showrooms it will compete with the Maxima, Avalon, G8, and other big sedans.

    Sales up 14% - anyone got a break down of which models did well?
  • ateixeiraateixeira Member Posts: 72,587
    Noone mentioned this, but what did you think of their super bowl ads? The one where they had the German and Japanese executives rambling angrily about Hyundai having won North American Car of the Year.

    I thought Audi did it better, but it was still pretty good.
  • backybacky Member Posts: 18,949
    Well, according to Advertising Age, Hyundai did it the best.

    It won't top any of the many meaningless Super Bowl ad charts, but the best advertising in the big game was Hyundai's "Contract."

    http://adage.com/columns/article?article_id=134220

    And they also think Hyundai did it better than Audi.

    If the A6 weren't so fantastically gorgeous, this would be $6 million-plus down the drain. But factoring in the fame of English actor Jason Statham and the novelty of a noisy car chase, it's only about $5.5 million down the drain. Wanna compare yourself to the competition? See "Hyundai" above.

    http://adage.com/article?article_id=134248

    P.S. There is a thread on the Super Bowl ads in the 2009 Genesis discussion.
  • fintailfintail Member Posts: 58,437
    I think they missed the history, and the hilarity of one rather using their feet than an ES, which is kind of an ultimate anti drivers car.

    The Hyundai ad isn't bad, mind you...but the cynic in me doubts the competition are having angry meetings because of this award.
  • backybacky Member Posts: 18,949
    No, I'm sure the NACOTY for the Genesis hasn't even come up in discussions among executives of other automakers. Nor have the sales numbers for January, showing Hyundai up 14% while every other automaker except Kia and Subaru were way down, year-to-year. They are probably talking about which plants to shutter first, who is going to go back to testify before Congress when it's time to ask for more money, and other important stuff like that.
  • fintailfintail Member Posts: 58,437
    I don't recall NACOTY having a whole lot of clout in the past. It doesn't set the market on its head...

    I don't think MB/BMW/Audi/Lexus/anyone else who supposedly is competing with the Genesis is asking for congressional handouts.

    One month...
  • backybacky Member Posts: 18,949
    No, the non-U.S. automakers would need to approach their own governments for financial help, should they need it.

    http://www.usatoday.com/money/autos/2009-02-06-toyota-net-loss_N.htm?csp=34
  • fintailfintail Member Posts: 58,437
    Well, it's not like Hyunkia has never received aid...

    And it's not like any monies begged for by the others today are because of the competition.
  • backybacky Member Posts: 18,949
    And it's not like any monies begged for by the others today are because of the competition.

    That is one of the most remarkable statements I think I've seen yet in the CarSpace forums.
  • lemkolemko Member Posts: 15,261
    I got to sit in a Genesis at the Philly Auto Show last Saturday and to be brutally honest, the Genesis is NOT the second coming of Lexus. In fact, I seem to remember being more impressed with the original LS400 than I recently was with the Genesis. The Genesis seems to me more of the second coming of the Toyota Avalon. One could say the Avalon is arguably nicer than Lexus' own ES350 which seems to be more of a Camry Deluxe. I also liked some of the details in Hyundai's own Azera better - especially the interior door handles.
  • joe97joe97 Member Posts: 2,248
    Well, given the Superbowl audience, which most were not car buffs like we are, likely only a few got the point of the ads. Most people I was with watching the game thought the Hyundai one was better simply because it was funnier; nonetheless, neither of the two ads made up a lot of the coversations in the room.

    That said, Hyundai looks to be the winner again on the automotive front, as its website traffic rose by 82% on kbb.com; followed by Audi, 45%, and Toyota at 13%:

    http://sev.prnewswire.com/auto/20090204/LA6652604022009-1.html
  • prosource1prosource1 Member Posts: 234
    'I got to sit in a Genesis at the Philly Auto Show last Saturday and to be brutally honest, the Genesis is NOT the second coming of Lexus.'

    It's funny you mention that because Automobile, which has always been tough on Hyundai, had an opportunity to spend some time in a Genesis. His initial impression was one of 'meh' but after some seat-time he's changed his tune. This guy knows his stuff and this read is a must to get what appears to be a very objective but insightful take on the Genesis.

    http://www.automobilemag.com/features/columns/0903_hyundai_genesis_appeal/index.- html
  • joe97joe97 Member Posts: 2,248
    One month...

    If you are referring to Hyundai's January sales being one of the few which experienced a rise, certainly we'll have to follow in the upcoming months to see if there is a trend. The assurance program certainly worked to Hyundai's advantage, and with the winning streak of the Genesis (numerous car of the year awards, including NACOTY), the soon arrival of new products and ad push, I expect Hyundai to continue attracting consumers into the showroom.

    As for the Genesis, the product has been more than just "one month". Despite the up and down (mostly down) industry, the Genesis has been a solid performer, and has had a very consistent half a year or so since introduction.
  • rockshocka1rockshocka1 Member Posts: 310
    is certainly something every car maker should be proud of & definitely market.

    But, just to play a little devil's advocate for fun...

    Aren't the qualifiers something like brand new car, substantial redesign & value? The finalists were Genesis, VW Jetta TDI & Ford Fusion (or something)?

    Doesn't seem like a comparo for best in class or anything. They openly called out the 5 series, Lexus LS, Porsche & others in commercials I've seen since launch.

    I have no seat time in the Genesis, but can't deny the sales & potential sexiness of the upcoming coupe.

    But, re NACOTY, I take that with a grain of salt regardless the manufacturer.
  • fintailfintail Member Posts: 58,437
    Maybe I didn't word that clearly enough, my bad. By competition, I mean Hyunkia, and by the beggars I mean those who make products the Genesis competes with, or those the fanboys think it competes with.
  • fintailfintail Member Posts: 58,437
    Yes, I was referring to sales. Give me a couple years of results like that vs the competition, and I will give credit. I don't believe Hyundai is going to lose ground faster than anyone else, mind you.
  • fintailfintail Member Posts: 58,437
    I see it as an ES competitor, maybe GS too, but that's not being very nice as the GS is perhaps the most invisible car in the Lexus lineup, only saved by its AWD option. It's probably not an LS, which was over-engineered, benchmarked on the W126 S-class, and was more of a value shock to the 1990 market then than the admirably equipped Genesis is now.

    I see screaming deals on year old Azeras in used car rags - to the point where I would recommend one to my mother if the nearest dealer wasn't more than an hour away from her house. Are they dumped in fleets or something?
  • backybacky Member Posts: 18,949
    By competition, I mean Hyunkia, ...

    Give me a couple years of results like that vs the competition, and I will give credit.

    :confuse: :confuse:
  • fintailfintail Member Posts: 58,437
    Different posts, different contexts. I'll try to type slower next time.
  • joe97joe97 Member Posts: 2,248
    Just at the turn of the century, Hyundai notched 164K in US sales; they are now moving 400K+ units/year - that's a pretty good clip, I'd think.

    Worldwide, Hyundai has moved from the 11th automaker to now as the 5th in the world, behind Toyota, GM, VW, and Ford.

    Perhaps the most telling of all, Hyundai is still one of the few automakers turning a profit in one of the worst economic climates; even the once invisible Toyota has reported huge losses.
  • joe97joe97 Member Posts: 2,248
    Aren't the qualifiers something like brand new car, substantial redesign & value? The finalists were Genesis, VW Jetta TDI & Ford Fusion (or something)?

    The third finalist was Ford Flex.

    FWIW, the short list nominees:

    Audi A4
    BMW 1 Series
    Cadillac CTS-V
    Dodge Challenger
    Ford Flex
    Honda Fit
    Hyundai Genesis
    Jaguar XF
    Lincoln MKS
    Mazda 6
    Nissan GT-R
    Pontiac G8
    Toyota Venza
    Volkswagen Jetta TDI
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