Is There Room in the Luxury Market for Hyundai?

bobad

This has been brought up, but Hyundai uses more robots in the manufacturing process than other manufacturers. The robots are also manufactured by Hyundai, who is a leading manufacturer of robots. I think that gives them a large advantage in price and quality.

ateixeira

Interesting video.

2 things stood out to me - Hyundai is now #5 in the world. Gosh, I remember when they had broken in to the Top 10, and that wasn't too long ago.

The other is the average wage - $22/hour. No wonder Detroit is not cost competitive.

m4d_cow

Hyundai's been #5 since late last year. The pecking order now is: GM, Toyota, VW, Ford and Hyundai I believe.

And judging from recent events, I suspect we'll be looking at a whole new list of top 5 soon. Toyota-VW-Hyundai-Ford-GM , perhaps?

ateixeira

I bet VW drops. They are too dependant on Europe.

houdini1

I wonder if Hyundai sales includes Kia sales.

toye

Yes they do. Hyundai bought Kia a think in the late 90's

m4d_cow

I bet VW drops. They are too dependant on Europe.

Not really. Remember that VW group consists of different brands. Their sales in east Asia particularly China constantly increase every year, and there are no signs of sales loss anytime soon. For example, many people don;t know this but Audi A6 is the highest selling midsize luxury car in the world, more than even the famous Mb E-class.

Hyundai group includes Kia. Kia plays in the lower economy market, while Hyundai takes the upper market nowadays.

stever

VW has a bit of a cash flow problem though. A bunch of their cash just flowed to Porsche.

Porsche Tries to Deflect Bankruptcy Talk (Inside Line)

ateixeira

They need to be more successful in the volume segments, and I don't see too many Rabbits or Polos in China or India given all the Tata Nanos and low-priced Chinese cars arriving so often.

joe97

Perhaps Fiat may get into the top 5 if they'd get their way of acquiring all of the troubled brands ie Chrysler, GM Europe. People are saying Fiat may becom the new GM (no, that wasn't a complement).

joe97

VW has a large presence in Europe (obviously), China, and South America.

China is one of the few Asian markets VW has tapped, benefiting largely from its early entry into the market.

Other Asian countries, however, VW has not been as successful, such as another large market, India (where Maruti Suzuki and Hyundai are the two of the larger players).

m4d_cow

Fiat's been in constant profit nowadays, but they've just come out of a dark recent past. I agree with you, it seems too obsessed on upsizing, not a good thing.

ateixeira

Oh my, is it even possible? We all agree on something.

Quick, back to disagreeing about Hyundai. I'm starting to feel too warm and fuzzy.

m4d_cow

That's easy to do, but where do we start from? :P :shades:

stever

Porsche was the No. 2 brand, followed by GM's Cadillac, then Hyundai and Honda.

Lexus was No. 1. This is the annual Initial Quality study, not one of the long term ones.

"J.D. Power credited the improvement to several well-received new models that were launched in 2009. It said vehicles like Hyundai's Genesis, Kia's Borrego, Toyota's Venza and Volkswagen's CC performed better than their segment averages. Several redesigned 2009 models also scored well, J.D. Power said."

Study: Detroit lifts quality but Toyota still king (Yahoo)

fintail

As I have seen zero of them on the road, I have no proof that the Borrego actually exists :P

ateixeira

It's a good sign, but IMHO not very meaningful, as it only covers the first 90 days of ownership (when you're under warranty anyway). In other words, it's not a good predictor of long-term durability.

hjc1

I have owned a 04 XG350, 07 Azera and now own a 08 loaded Entourage. All 3 cars never had any problems.. I wish I could say that about The Toyota products and Audi cars that I have owned before. I'm sold on Hyundai products and the dealership that I deal with.

houdini1

Thanks for posting that report. The most amazing thing to me was that Lexus, the top brand, had .84 problems per vehicle while Mini, the worst brand had only 1.62 problems per vehicle. A difference of less than one problem per car separated first from last.

stever

Yeah, cars are lots better than they used to be.

I don't read the MINI boards so I'm not up to speed on it, but I don't see many reliability complaints over in Edmunds Answers. The other "bad" brand, Land Rover, gets awful reviews in the forum, but most of those relate to the Freelander.

Hyundai doesn't seem to think they offer a luxury brand:

Hyundai is the Highest Ranked Non-Premium Nameplate in the J.D. Power and Associates Initial Quality Study (PR Newswire)

Funny, the source link at Hyundai is down. Maybe someone didn't like the "non-premium" characterization.

carolinabob

The problem with JD Power is that the survey sample is very small and who selects it anyway. First 90 days is meaningless, first 3 years is what counts.
Also, JD Power has so many categories that most products can find a slot to be in top 3, if not number 1.
Glad to see Hyundai improving, but they were 3rd in 06, ? in 07, 13th in 08 and now 4th in 09 in JD Power per Autoweek.

backy

Hyundai doesn't seem to think they offer a luxury brand:

Maybe because Hyundai is NOT a luxury brand/nameplate. Just like Toyota is not a luxury brand. But that doesn't mean that Hyundai cannot produce a car that competes against cars from luxury brands.

stever

I don't think it's meaningless. The surveys aren't self-selected like Consumer Reports and you can go back to the Initial Quality survey 3 years ago and compare those brands with the current long term survey that JD Powers does. There looks to be a correlation there to me. Check Edmunds Daily for my rehash there.

The Hyundai corporate link is back up:

"We’re particularly delighted with the strong launch of Genesis, the North American Car of the Year, which surpassed several luxury competitors. We are also thrilled with how well the fuel-efficient Elantra and Accent scored.”

tenpin288

Here's an interesting quote from the head honcho that was in USA Today. Take note of the last part of this blurb...

At Hyundai, the mood was ebullient as the automaker came in fourth — behind luxury brands Lexus, Porsche and Cadillac.

Hyundai has been working to raise its quality image for more than 10 years, says acting CEO John Krafcik, after it began offering 10-year powertrain warranties.

"It's been a wonderful internal rallying cry ... and it's not costing us anywhere near what we thought it was going to," says Krafcik, noting the warranty is here to stay.

Interesting.

iluvmysephia1

that Hyundai/Kia are going to keep the generous Warranty.

houdini1

Certainly Hyundai could be called a non-premium brand. That does not mean that they don't make any premium cars. IMO.

Additionally, the Powers report stated that "The Genesis significantly outperformed other Premium Sedans.

Insure.com has ranked the 2009 Santa Fe as costing less to insure than any other vehicle.

iluvmysephia1

exactly. Hyundai is no slouch as a car/SUV-maker, by any stretch. They have hit the big time and can no longer be drug through the mud by anyone.

Let's put it this way, the one dragging them through the mud now is only straining their own muscles and giving theirselves a hernia. May they rest in peace.

ateixeira

It's a good intial sign, and certainly not meaningless, but...

I think their 5 year Durability Study is more meaningful, for instance.

Also, I recall the Hummer H2 came out and it did poorly, and one of the reasons stated was that gas mileage was worse than owners expected.

Here's the thing - how is poor gas mileage a quality problem? I mean, it's a Hummer, for crying out loud, how does JD Power interpret that as a lack of quality? They suck down gas very reliably, in fact they are probably the most RELIABLE consumers of gas on the planet! LOL

Same for the Mini Cooper - owners complained about a cup holder. The design may not be the best, but is that really a quality problem? I dunno, that's a stretch.

If we're talking about an average of 0.8 to 1.6 "problems" per car, and poor gas mileage on a Hummer or a lame cup holder on a Mini counts as 1 "problem", then maybe it is meaningless after all.

I think it's a good sign that Hyundai has moved up, and there are fewer complaints, but this is merely an early indicator, not a solid measure.

stever

the Hummer H2 came out and it did poorly,

Yeah, that was the initial quality one I think, and JD Power redid their survey stuff after that. I think they gave less weight to the "The Driving Experience" section or expanded some of the other categories to compensate for the little gotchas like that.

True Delta never got my attention and CR has their own problems. Edmunds switched from JD Power Star Ratings a while back and now uses Identifix, which is what MSN Auto uses (or used).

ateixeira

Glad to hear they've refined the way they measure Quality. I guess I would not have a beef if they'd called it "Ownership Experience" instead, something like that.

How timely, though, that there was an Editorial in Automotive News yesterday by Jesse Snyder headlined "J.D. Power Initial Quality Survey defeats itself", arguing, among other things, that automakers are "doing such a good job that the Power IQS is almost meaningless as a buyer's guide".

One example they cite is that Honda's 5th place finish sounds much better than Saturn's 24th placement, but the actual difference is 0.2 problems per vehicle between the two brands, hardly worth mention.

I think what it will do is penalize a single widespread flaw, a car could go from first to worst if one single component is designed poorly, and it may not even be very significant.

backy

But I wonder if the exposure from surveys like the JD Power one give the automakers a little extra incentive to improve their quality? Look at the reactions of the automakers to the survey, e.g. the quote from the Hyundai exec. I have a feeling the automakers use the survey as a benchmark as to how well they are doing. Thus the JD Power survey doesn't actually defeat itself, but has helped encourage the automakers to improve their quality to the point where the scores are better than before, and closer than before. Maybe it is more accurate to say the JD Power survey is a victim of its own success?

Also, if a single important component is designed poorly, that could be very significant and maybe the car deserves to go to the bottom of the list in that case--especially since the overall quality of cars today is quite high relative to the past.

ateixeira

I do think it's an incentive to reduce the number of defects that would show up as lower quality scores, yes.

But that also might simply make automakers risk-averse. Why go out on a limb with a new technology if you'll going to get skewered if many units turn out to be faulty?

It'll certainly make the testing process more important.

the JD Power survey is a victim of its own success

The Editor said the same thing.

Any how, I think we're drifting a bit off topic, so taking this back to Hyundai...

The results may actually be more impressive that I was thinking, simply because the Genesis has a lot of new features that don't exist on their lower-end models. So to launch a new car, new powertrain, and add a lot of extra featuers (i.e. potential faults) and actually improve on IQ scores is an accomplishment for sure.

The funny thing is I don't think JDP measures Quality, per se, but problems or defects.

To clarify - the Genesis uses a high grade of quality leather, but the plain old cheap cloth on an Accent would earn it the same score (as long as it's not tearing apart at the seams).

stever

Excellent point about the small difference in the top ten and the bottom ten on the survey.

Ok, time for a plug for the Genesis long term blog post earlier this week - it's all about quality (if you consider class to be an element of quality):

2009 Hyundai Genesis V6: Classy Looking Interior

ateixeira

The leather on the dash looks great. Cover the H and ask someone what that car costs, and don't be surprised to hear numbers approaching 6 figures.

I like the chrome trim on the steering wheel - very subtle, tasteful. I'd prefer less of the silvery stuff on the center console, though. Flat, matte black or wood would be better there.

The trim around the outer vents and the stripe at the top of the leather strip also look nice.

I sat my wife in one of these at a car show and she said "This is a HYUNDAI?!"

backy

Actually the JD Powers IQS doesn't just measure defects but asks about buyers' opinions of car design, features etc. That is a relatively recent change in the IQS--in the past it did just measure defects. But I agree that Hyundai's bump up in the IQS is impressive when you consider it included the all-new Genesis sedan (with lots of techno-features, btw), a reworked Sonata, and the relatively new Veracruz (also a model with lots of gizmos that could break). I don't think the Genesis coupe and Elantra Touring were out in time to be included in this most recent IQS.

I think the need for automakers to compete with each other on technology outweighs any tendency they might have to hold back on tech because of the implications in their JD Power IQS score.

fintail

I hope all that silver is actually metal and not plastic.

backy

Titanium alloy no doubt.

lemko

Ah, you know those Genesis interiors are made from those ultra-exotic materials known as plood, pleather, and pluminum!

ateixeira

I think the leather is actually real.

Not sure about the wood and aluminum, though.

Real aluminum can be a bad thing - it dings very easily, such as when you hit a briefcase against it. And then good luck getting that dent out.

Plastic is usually painted and that scratches, but it's far more resilient than aluminum.

Wood looks great but over time it can warp and crack. And of course the appearance will depend on the quality of the finish.

m4d_cow

Regarding the interior, well even without the badge I'd never mistake it for something costing more than 50k.

The leather is real, I'm very sure of it. Lexusgrade? No, but about the same level as Acura or Cadillac IMO.

The wood and metal, no matter what some others here say, are definitely plastic. I will never change my opinion about that. Wood is NOT flexable, plastiwood is. Real metal heats up fast, plastic doesn't.

All things said, the quality of those materials are good, and overall, an effort worthy of praise.

bobad

Did you see the R/R being manufactured on Discovery/History channel?

All "wood" panels are actually plastic, covered with very thin wood veneer. So yea, "wood" parts can be flexible. But I don't think the Genesis has any real wood, not AFAIK.

I read on one of the auto magazine sites (or maybe saw it on TV) that the Genesis console was real aluminum. Unless the aluminum is paper thin, it's very durable.

m4d_cow

Hoo interesting, I should watch that.... I wonder if RR is breaking from tradition, though it's only natural since plastic layers increase the durability of the materials.

houdini1

I have always wondered about that. Wood veneer accents are treated like gold when used in autos while hardwood floors in homes are nothing special. In fact most of our homes are built almost entirely from wood. We also burn it in our fireplaces. Sure I guess there are certain "exotic" woods but that is mostly just marketing hype. Just think of all the cheap wood veneer furniture that is around now.

If RR is using thin wood veneer over plastic just imagine what the other mfgs are using. Is there such a thing as "wood veneer paint"?

bobad

If RR is using thin wood veneer over plastic just imagine what the other mfgs are using. Is there such a thing as "wood veneer paint"?

Actually, RR uses plastic as a quality measure. Real wood panels would rattle and crack in a short time. The plastic panels are more stable, and should last 30 years if kept out of the sun. I'm no fan of plastic, but in this case, it's the best solution. RR used gorgeous walnut burl veneer in the program I watched. I suppose they would use any wood you choose, because each car is custom built.

All the glues they use to secure the panels, upholstery, insulation, etc. is where much of the "new car smell" comes from. No wonder you feel giddy riding in a new car.

stever

Is there such a thing as "wood veneer paint"?

Sure.

Our capitol building has these humongous marble columns. Very impressive. Paint.

Fancy paint pigments mixed in with cement, but paint. No reason you couldn't coat your dash with some of that. Scagliola is Italian for paint I guess. :shades:

fintail

Wood veneer paint - lower line IKEA furniture.

Dashboard wood tends to be a very thin veneer for safety reasons too - splintering etc. Even on 50+ year old MB it is this way, although the wood along the windows and pillars is much thicker.

fezo

Not my old 54 300B. That sucker had a solid piece of wood dash. We pulled it out, stripped it and refinished it way back when.

fintail

Yeah, the Adenauers and pontons were the last of the thick wood everywhere. My fintail has a veneer dash, but the windshield and side windows are framed with that thick solid wood that people often remove and refinish (but seldom get the color right).

The 1960s W112 coupes have a lot of thick wood too - a good quality refinishing in proper colors and textures can run several thousand dollars.

fezo

Oh, we certainly did not get the color right. A real collector would cringe at the things we did to that car. Fun though.

fintail

I bet you refinished it in a light color - everyone seems to do that, thinking it is Heywood Wakefield furniture or something.

Back when you had the car, it was just an old beater - and in that condition it would be the same today. I don't hold it against you