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Here's a a personal anecedote that boils down the question- yes, this actually happened to me some 10 years or so ago.
I was driving a BMW 328i at the time... I went to visit a friend who had just purchased a new car. He'd bought a Madza RX-7, very nice, very nice indeed, and as I recall, he'd spent more on it than I spent on my BMW. Now, both he and are are 'car-guys' and I recognized that performance-wise his vehicle made my car pretty ordinary.
However - to the point- his mother was visiting his home the day I visited. As I was leaving, she came out to say goodbye, and saw my 328i, which, of course, I'd said nothing about. After all, it was just a car. However, when she saw it, she said, " 'Johnny' could have had a BMW but he decided not to."
So, that's your question - do other people's perceptions matter? I lean towards the side that says they do and that it takes time to change them.
Cadillac survived for decades on perception when the cars themselves were lacking. Toyota used the Lexus brand (! Important Disclaimer follows!) in the U.S. Market to change the perception that Toyotas were economy cars.... VW found with the Phaeton that it did matter - even though they discarded the "economy car" market in the 90's.
SAAB however suceeded in moving upmarket, as did Volvo. Mini moved upmarket.
So, it can be done. However, it takes time.
Here's the next question - can high-end and low-end vehicles co-exist? Madza found they couldn't (re Amati and the Millenia). Jaguar couldn't even move slightly down market successfully.
Oh, and Toyota in Japan, isn't a good example. Toyota IS the General Motors of Japan, and there are many subdivisions of branding within the Toyota (see GM) label.
FWIW
And what are you comparing that Elantra to? You can't possibly drive that and then turn around and try to compare it to an Accord or Camry. That would be as ridiculous as driving a 3-series and comparing it to an E-class. Not even close to being in the same class of vehicle in any respect. I've never driven any Hyundai, but have looked inside and out and they do seem to be quite comparable/equal to Hondas and Toyotas, class for class.
Incidentally I am nothing more than an enthusiast that finds the Gen Sedan a rather intriguing effort (a good one as well) on Hyundai's part to improve its image - and indeed it may someday do just that. For the time being, however, and pending a possible Genesis brand I do not think any Hyundai product is a luxury anything. And you guys, for some reason, think this is some sort of slam - not the case - Chevy, Ford, Toyota, Nissan Honda et al also are mass market mfgrs that don't make luxury anythings. Why is this so difficult to comprehend, without you assuming some sort of agenda on my part?? :confuse:
:confuse:
Hmm... I must've fallen asleep in Geography class when they discussed Oceania. Where is this area? Is it where Atlantis used to be?
:confuse:
It includes many small island nations as well as Australia and New Zealand, and sometimes Indonesia.
Here's a country list from the omniscient Citation Needed Wikipedia
http://en.wikipedia.org/wiki/List_of_Oceanian_countries_and_territories
So, it can be done. However, it takes time.
As far back as the 80s I have always thought the Swedish cars 'upmarket'. Brands that made their reps on safety and/or as bad weather vehicles. Also priced at a premium. But still not'luxury brands, IMO, despite the S80s etc.. Much like Acura - despite the RL.
the next question - can high-end and low-end vehicles co-exist? Madza found they couldn't (re Amati and the Millenia). Jaguar couldn't even move slightly down market successfully.
hasn't been done yet, has it ?:confuse: - and you forget about VW that failed, of course, trying to sell a perfectly qualified 'lux' sedan that even had the luxury price. Folks simply not willing to spend that kind of money on something with that label and sold are at lowly VW dealership. The current Gen Sedan has a pricetag low enough that it would appeal to a wider cross section of buyers in terms of affordability. If Hyundai really does try the Equus over here as a Hyundai, then don't we have another Phaeton?
And it'll be sold at VW dealers, afaik.
Whether it'll sell any better this time, who knows.
I reject conventional thinking, and others do as well. (I guess that just means there is always a shift in what is conventional)
Things change, and it takes perception a few years to catch up with reality. I like to be on the cutting edge, and think it would be smart to take advantage of that few years where (in the case of Genesis) you can get true luxury at upscale prices. I can't even see the car's badge while I'm driving, so I don't care what it looks like. If anyone thinks a badge "stands for" something, I have some beach front property for them in Nebraska.
and if so, you have to wonder if there isn't a price reduction in the cards...
Either way, I contend the same problem remains, is a Hyundai branded product at $50k (the Equus) really any different than a VW branded one at $70k - the price difference between say the Sonata and the Passat is after all of similar proportion.
VW owns Bentley, right? Would you go to a VW dealer to buy one? Or even to a Porsche/Audi dealer?
True luxury is a blinged out paint job.
(Straightline link with better pic proportions here)
So maybe not the antique I was thinking but still relatively dated.
The Tau DOHC 32-valve V8 engine isn't dated, so the original point remains. This ain't no Town Car.
and BMW owns Rolls - and they (the BMW dealer) also NOT where you go to buy one of those either
Kinda like that scene from Pretty Woman - Julia Roberts in a high priced clothing store, with money and nobody wants to deal with her. Sent a high priority email to the movie's producers - I would have been more than happy to give Julia anything she wanted!
Still, though, with all the complexity they have more problems than the average car.
As for quality of materials vs. construction, I certainly see your point, but it's hard to separate the two. A cheap fabric makes a seat look cheap no matter how well it's sewn together.
And the highest quality leather in the world will still look like crap if the seat is not well sewn together.
Which makes me wonder is the Lotus they were driving a luxury car?? :P
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I am curious--who told you that? If by overseas you mean the ROK, yes, I can see that as the ROK is Hyundai's home market. But what about the rest of the world?
If they are going to buy the car for me, then yes, their opinions matter. For example, if my company were to give me a car allowance and tell me I have to buy a particular kind of car, to impress customers, that's what I'd do (but that will never happen). If. like Johnny's mother, they are just sticking their nose in, I don't care what they think.
FWIW, my mother likes my Rabbit better than the 328Ci I owned before. That must mean VW is better than BMW.
Is it? The title says this discussion is supposed to be about whether there is room in the luxury MARKET for Hyundai. Nothing there about whether Hyundai must create a separate brand to attack the luxury market. That is one of the topics of discussion here, but not the sole focus of this discussion.
Why is it so difficult to comprehend that introducing a separate luxury brand, with separate dealerships (as you say Hyundai should have done before ever attempting to sell a car like the Genesis) is not the only way to sell luxury cars? :confuse:
certainly an exotic, there are some Lotus models that even dispense with unnecessary frills - like interior carpeting.
don't know that they could've worked it right if Gere was driving a Tiburon or an Scoupe. :surprise:
Not difficult to comprehend at all - it's just that its NEVER been done that way, and there are more than a few bodies in the the street to prove it as well as several examples of how to do it correctly. Don't be surprised if Hyundai finds it necessary to do precisely that (separate dealers) - especially if they are serious about a $50k 'Equus' as another poster suggested- building/acquiring those Genesis dealerships would have to be dirt cheap right now. .
The regular brand seems to suffer because the luxury brand places a ceiling on the regular brand. They can't be too nice because they will steal sales from the luxury brand but on the other hand they have to be nice enough to compete in their segment and that is where the problem lies.
Hyundai does not have that problem now and I believe this gives them an advantage, as they have a full range of economy cars and luxury cars under one roof. They can make their entry level cars as nice as they want without infringing on a separate luxury division, etc.
What they should do instead in upgrade all their dealerships and service depts....much cheaper to do and more effective.
2013 LX 570 2016 LS 460
Yeah, but I'll add another twist here. Why would they want to right now? They are up when just about everyone else is double digit down. If I were Hyundai right now I would keep on making strides in quality and perception, not bring the Equus here, and wait until the economy is good enough to bring over a new divison.
The whole Saturn dealer network Idea is intruiging, however, would they even be able to pull it off in a decent time frame? The Equus launch would have to be delayed. Think of all the things that would need to take place:
1:) Negotiations of taking the dealers over (leases, etc)
2:) Marketing plan for a new "brand"
3:) Training Saturn techs to work on high end Hyundai's
4:) Renovation of the dealerships.
5:) Dealing with all the ticked off Hyundai dealers that just lost some nice money makers
6:) Product.... is the Genesis and Equus enough? Would at least have to rebrand the Veracruz and maybe turn the new Sonata into a "lux" model. (think Camry to ES 350)
We all say that GM made some bad decisions, IMO this would cost Hyundai millions and they know it.
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The Toyota Avalon and the Nissan Maxima are perfect examples of this. Really only a few things separate them from entry level Lexus/Infiniti.
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Good advice. They ought to hire you.
Don't remember where I heard that though , too darn old
of course it would - and this would be the same Hyundai that launched the Genesis in Super Bowl ads - at what, a million per ad?
Our only problems have been a bad window regulator and sun visor, and that's it! That is all.
Even my Honda Accord that started with a VIN with one had it's share of problems, but by no means was it comparable to the problems you'd have with a Chrysler or something like that.
Okay, fair enough, if Hyundai can rack up 10 years straight of solid red dots in CR, then I'll say they've reached the creme of the crop, which is what Toyota and Honda have achieved in the past.
My test drive showed nothing as to reliability. I meant to infer that the BUILD and MATERIALS, and PERFORMANCE qualities of the Elantra have a long way to go to catch up to a Corolla or especially a Civic of today.
However, the Elantra of today is light years ahead of the tin can Kia I drove in the late 90's, or the Rio I drove in the mid 2000's.
What would have the audience impression have been if Richard Gere was driving a Genesis instead of a Lotus?
How about the Grey Poupon commercial with a Hyundai Genesis instead of a Rolls?
Can James Bond drive a Genesis Coupe in his next movie instead of an Aston Martin?
What about TV's Miami Vice with a Genesis instead of a Ferrari?
Hyundai's powertrains have made a lot of progress since the Theta was introduced in 2004 (in the ROK). Hyundai has a complete line of modern powerplants now, from small I4s to the 4.6L V8. They are no longer lagging in powertrains, but do need to use their latest small engines in small cars like the Accent and Elantra. That will happen for their next redesign.
At that point Hyundai will have passed Toyota and Honda, which have slipped (including in the CR surveys) in reliablity since their heyday.
Here's one for you: compare a 2010 Corolla and Civic and 2010 Elantra back to back. I think you'll see Toyota (especially) and Honda have nothing over Hyundai in build or materials. Also performance (FE, acceleration etc.) are extremely close. Then this spring, compare the 2011 Sonata to the 2011 Camry. (Or even the 2010 Sonata to 2010 Camry). And how about the 2010 ES or GS to the 2010 Genesis sedan? Don't judge Hyundai by one test drive of a 2007 Elantra.
ahh, and that answer should be obvious. If Gere was driving a Genesis ( or something similar) they would've had to fire the casting director.
Toyota, Honda (and Nissan) all suffer a bit by large volume increases compounded by the fact that the manufacturing of their most popular models has been properly relocated to this country fro quite a few years now. The same cannot be said for many of the D3 models
Dogma is always a good excuse.
If Hyundai would do the shady name change thing ala Toyota, their prices would go up so high they would have to compete directly with the German cars. They would lose their "sensible car" status, and a major part of their market. I think you would like that!
Toyota not so sterling
Let's hear your "spin" on this.
Since you mentioned the 2009 CR Auto Issue, here's what it has to say about Hyundai reliability over the period tracked in that issue (I have noted when there were design changes for a model):
Accent: Overall "Better than Average", 2003 (introduced late 1999) through 2008 (2006-2008 introduced late 2005)
Elantra: Overall "Much Better than Average, 2003 (introduced late 2000) through 2008 (2007-2008 introduced late 2006)
Entourage: Overall "Much Worse than Average", based on one model year, 2007
Santa Fe: Overall "Better than Average", 2003 (introduced late 2000) through 2008 (introduced mid 2006).
Sonata: Overall "Better than Average", 2003 (introduced late 1998) through 2008 (introduced early 2005).
Tucson: Overall "Better than Average", 2005 (introduced late 2004) through 2007 (not enough data for 2008).
Veracruz: Overall "Average", 2007-2008
XG and Azera: Overall "Average", 2003 (XG, introduced late 2000) through 2008 (Azera, introduced late 2005)
I see a lot for Hyundai to brag about going back ten years, since some of the designs Hyundai rates "Better than Average" or "Much Better than Average" in reliability date back 9-10 years. Also note only the Entourage (no longer sold) is "below average" in reliability, and only two models, the XG/Azera and Veracruz (both very low volume), are "Average".
Note also the reliability scores for the US-sourced Santa Fe and Sonata are at least as good if not better than they were when the cars came from the ROK, with one dip (Better than Average to Average) for the 2006 Sonata V6.
If you compare these figures with those for Honda and Toyota in the same magazine, you'll see Hyundai compares very favorably. Honda has six models at "Better than Average" and four at "Much Better than Average". Toyota has four models at "Average", five at "Better than Average", and nine at "Much Better than Average".
Maybe you want to wait to buy a Hyundai until CR shows ten years of solid red dots for every model. That's up to you. But note that under that condition, you would not be able to buy a Honda or Toyota today, since they don't have ten (even 6) years of solid red dots across the board in CR's reliability survey (again, referring to the 2009 Auto Issue you cited).
Especially the cost cutting in some of the entry-level makes, it has dropped, look closely and you'll see.
I will reference the small SUV segment because that's what I've shopped lately. Look again at the RAV4 and CR-V, they are nothing special inside, far from it. All the plastics are hard - all of them. The carpet is thin, the metal trim isn't metal, it's painted and not even textured or clearcoated.
Same for the Forester we purchased, and the Mitsu Outlander. The Ford Escape was the only one that stood out as being any worse than the others, but Honda and Toyota did not stand out in any way, except compared to the Escape.
The Santa Fe is at least par with any of those. The Veracruz is vastly better than any of them. No contest.
Toyota uses far better materials on the Sienna, which is why I bought that instead. The carpet is thicker than the RAV4's, the dash is padded, the headliner uses fabric instead of cheap peach fuzz sprayed on cardboard like the RAV. The difference is quite obvious.
I guess it's my pet peeve when people just assume all Honda and Toyotas use superior materials vs. the competition - this is one very clear example of how they don't - especially at lower price levels.
Haven't been in a Corolla lately but I'm skeptical when someone says the materials are nicer than the Elantra's, because that's not the case with the CR-V vs. Santa Fe.
It may be public perception - Honda and Toyota have scored well on quality measures so people just assume they use nicer materials, and the myth continues to perpetuate itself.
Not difficult to comprehend at all it's just that its NEVER been done that way, and there are more than a few bodies in the the street to prove it ....
Dogma is always a good excuse
Just because it's never been done before doesn't mean that it can't, but it usually means there's a darn good reason it hasn't been done before...
Or, if you prefer :
"The race is not always to the swift, nor the battle to the strong, but that is the way to bet."
Damon Runyon
2013 LX 570 2016 LS 460
Ten years ago, no automaker had ever offered a 10-year, 100k mile powertrain warranty.
Before this year, no automaker had offered an "assurance" program that would buy back your car if you lost your income.
Good companies follow "best practices." Exceptional companies innovate.
Precisely what Hyundai should do as well, establish the Genesis to a different set of materials qaulity and quality control specs. and then charge more for it. Can't wait to hear you whine, if they do
Yes, the Hyundai long-term warranty is rarely applicable, due to the reliability of its cars.
As for "increased warranty claim costs"...
(HMA CEO) Mr. Krafcik noted that Hyundai's warranty costs have been cut in half, thanks to quality improvements, even as vehicles covered by Hyundai's long warranties move into the high-mileage category.
http://www.washingtontimes.com/news/2006/aug/03/20060803-084659-8422r/
Wharton management professor Lawrence G. Hrebiniak says Hyundai's success is the result of a cohesive strategy clearly designed to differentiate the firm from its competitors, combined with a willingness to make substantial investments to carry out the plan.
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2256
Yep, just a sales tool they were forced into... nothing innovative or strategic. You should teach at Wharton.
But it wasn't altruistic - it literally WAS do-0r-die for them in the U.S. Market.
Hyundai started exporting the Excel two-door and five-door hatchbacks to the United States in 1986, and followed two years later with the mid-size Sonata. In its first year as an export, 126,000 Excel models were sold.
The Excel suffered reliability issues in its first year due mainly to cost-cutting measures initiated at the South Korean plant. Sales dropped to such low levels that many Hyundai dealerships only survived by making repairs on the cars they had sold.
Hyundai management, alarmed at its sinking reputation in the United States, embarked on an aggressive campaign to improve quality at the plant. It also provided 100,000-mile, 10-year warranties on all its cars.
It's pretty hard to compliment someone for being a great swimmer when they learned because they were drowning.
I am not saying that their quality isn't good now.... however, let's not rewrite history to make them retro-active paragons of forward thinking and virtue.
The French are famous for great cuisine, and they like horse meat.... but they never ate the stuff until the French Revolution made beef hard to get.
I agree.
It worked out for Hyundai and their customers, though. Win-win.