Is There Room in the Luxury Market for Hyundai?

bobad

People calling them Beamer use to frost me, but I had to get used to it. Both Bimmer and Beamer are used about equally these days.

The LaCrosse is interesting. Seems to be a little heavy, lower gas mileage, and front wheel drive is a turnoff. Dollar for dollar, it seems fairly close to the Genesis. But who would be brave enough to buy a car from the government?

backy

The LaCrosse might be a safe bet (to buy), since it's propped up by sales in China, where Buick is very popular. I read that the LaCrosse was designed to appeal to the PRC market, e.g. large back seat for limo use.

But if the LaCrosse qualifies as a "luxury" car, with its FWD and V6 (and soon I4) engines, certainly the Genesis does. I see the LaCrosse as more direct competition for the Taurus, Avalon, and Maxima rather than the Genesis... except on price for the 3.8.

lemko

No need to worry about the LaCrosse! My wife has a 2005 model she purchased new and has yet to experience an unscheduled maintenance event. The car has 46K miles on it and she drives it quite aggressively. She would most definitely consider a new LaCrosse as would I.

searchprobiz

I am expat in Korea. The number of Luxurious cars in seoul is quite amazing (it is said that almost 20% of Seoul residents are "wealthy".
Just to explain, the bigger is the better in Korea .
Equus is a big luxurious car with "not too many" technical features, so the car is still easy to drive (this is the main issue with new BMW cars).
But most important is: Genesis is a big sedan that you drive yourself however Equus is a car for owner with a Driver.
This is very common in Seoul, but quite a niche market in America, no??

John

tenpin288

info from a recent Hyundai Think Tank chat transcript...

Hyundai USA CEO John K gave a live chat session last night with HyundaiThinkTank.com members. Here are some of the highlights:

- Confirmed next-gen Genesis platform will have AWD option
- Hyundai is considering a smaller Genesis sedan to slot beneath the current one
- Considering a “Genesis” SUV or CUV (not Veracruz)
- Genesis design language will continue to be both “classic and athletic”
- Seperate “Genesis” sales channel is still being researched
- Equus final name for the US still hasn’t been decided
- They are considering a unique “concierge” type service for potential Equus buyers.
- Next-gen Azera design has recently been finalized. John says it looks “hot” and will run circles around the new Taurus SHO and Nissan Maxima.
- Next-gen Azera features Hyundai’s new “fluidic sculpture” design language

This should get very interesting as time goes on.

dulnev

Yes

ignitepassion

I haven't heart much of hyundai as a luxury car, or is it just me

And i don't think luxury market will recieve hyundai well..

millwood0

Hyundai is essentially taking the Lexus strategy: value proposition. Remember that the LS cost less than $30K when first introduced?

As for me, I wouldn't buy any luxury car unless they tone down the styling a little bit - which the genesis seems to be doing.

bobad

Rumors of Azera's death are greatly exaggerated.

fintail

The LS cost around 40K when it was introduced - it was seen as S-class car for E-class money - those cars were what it sought to fight.

And with its BMW-esque side profile and unique grille, it's not so toned down as it is kind of familiar and inoffensive...which aren't bad, per se.

millwood0

"The LS cost around 40K when it was introduced"

I owned a LS for $29K, brand spanking new in 1989.

fintail

I'd like to see a copy of that sticker. What's the catchy line these days....'pics or it didn't happen'

I don't remember any LS coming in any anything significant under 40K unless it was one of the 12 cloth examples they made, and those were 36-37K IIRC.

houdini1

Better yet, why don't you show us an original sticker backing up your $40,000 guess? Pics or it didn't happen !

fintail

Original MSRP 35K

Base MSRP 36K

Base MSRP 36K

Base MSRP 36K

And many other references thanks to a 10-second google. This price is also for a base model, which very few exist - I've only seen one. I find it hard to believe any sold at 20% less than base MSRP when it was in-demand from the beginning. So, it happened

houdini1

Not quite.

Your second link had the most info. and it was a loaded, not base, 1990 LS for $36,000. Not in any of the links did it say base. The 89 model, not base, was $35,000. The other poster probably got a couple of thousand off that, so his $29,000. was closer than your $40,000. number.

If there was such a thing as a base model, the $29,000. was probably very close to being correct.

Thanks for posting that info.

backy

What IS close to $40k is the 2010 Genesis 4.6. Quite an accomplishment since that's $40k in 2010 dollars, not 1990 dollars.

(Yes, I know, a thinly-veiled attempt to get back on topic. )

I wonder if those who said the Genesis is priced too low to be a luxury car are happier now that the price went up on the 4.6 by $1500 for 2010?

dean3927

***************************************

Hyundai Genesis Coupe / VW GTI

http://www.marketwatch.com/story/the-best-cars-of-the-year-2010-01-02?siteid=YAH- OOB

houdini1

You left out the Sedan of the Year: Genesis Sedan !!!

fintail

There was no 89 model. All Lexus are model year 1990 and above.

"Base model" refers to free from options. There were no designated variants of the LS400 then, all Celsior cars wore the same LS400 badge no matter their option load. Nearly all cars sold in NA had leather, moonroof, and fancy stereo. This would bring the price to ~40K.

I want to see one single piece of data, from anywhere, showing a 29K LS400 in 1989-90. Link or it didn't happen :P

fintail

With some better marketing, the swoopy H could do what the swoopy L did 20 years ago.

In 1980, a normal S-class ran around 40K....which was a usual price for the LS 10 years later. Jump forward 20 years, and the Genesis is the same as that LS.

fintail

I saw a very nice looking Genesis coupe last week, in a pretty blue. I still don't embraced the oversize light clusters...but the weird dip behind the B-pillar that irked me now doesn't seem bad at all.

backy

Not quite the same... what cost $40k in 1980 cost about $60k in 1989, when the LS debuted. But what cost $40k in 1989 would cost nearly $70k now. And the Genesis has 125 more horses than that first LS, more safety equipment, better fuel economy, two more cogs in the transmission, etc. All for over 40% less than what the first LS cost, in inflation-adjusted dollars.

lemko

Actually, I remember the early LS starting around $35K or so. I believe the LS was quite successful, so I doubt there were any steep discounts unless it was the end of the model year. I recall the 1989 Mercedes 560SEL was stickered at $73,990 when I looked at one.

millwood0

"Link or it didn't happen "

you have to realize that things happen with or without a link on the web.

if I cannot find a link to fintail the person, does that mean you don't exist?

bobad

you have to realize that things happen with or without a link on the web.

if I cannot find a link to fintail the person, does that mean you don't exist?

Uh oh...

tenpin288

I posted this info on post 4307 but it hasn't seemd to get any comments so I'll try again and see if anyone wants to comment on it...

info from a recent Hyundai Think Tank chat transcript...

Hyundai USA CEO John K gave a live chat session last night with HyundaiThinkTank.com members. Here are some of the highlights:

- Confirmed next-gen Genesis platform will have AWD option
- Hyundai is considering a smaller Genesis sedan to slot beneath the current one
- Considering a “Genesis” SUV or CUV (not Veracruz)
- Genesis design language will continue to be both “classic and athletic”
- Seperate “Genesis” sales channel is still being researched
- Equus final name for the US still hasn’t been decided
- They are considering a unique “concierge” type service for potential Equus buyers.
- Next-gen Azera design has recently been finalized. John says it looks “hot” and will run circles around the new Taurus SHO and Nissan Maxima.
- Next-gen Azera features Hyundai’s new “fluidic sculpture” design language

Anyone have anything to say since what is in this seems to give an idea as to where Hyundai is going in the "luxury" market. Cap'n?

bobad

Haven't been over to the Think Tank in a while. Thanks for the update.

I guess AWD will be pretty popular among northerners and westerners.

Wonder if small Gen will be on Sonata or Azzy frame, FWD or RWD?

Equus needs a new name, and a face lift.

The right Azera price and options, along with improving reputation, should make more inroads for Hyundai. Azera needs SOMETHING to distinguish it from the
top Sonatas/Accords/Camrys.

fintail

All I want is one corroborating piece of info showing any LS sold in 1989-90 for under 30K. One anecdote, one sentence, anything.

Link it or it didn't happen

fintail

Yes, I meant it was the same principle. Just as an original LS was more powerful than a malaise-castrated 1980 S-class. 60K vs 70K isn't very significant anyway, especially for the customer in that price range.

fintail

Yes, a non-optioned LS could have been had for that...but can't imagine the low option cars being more than ~5% of production. Sadly Toyota does not offer any historical resources to such info. I've only seen one lowline LS, and the owner was holding on to it like it was some kind of future rarity. He didn't seem to understand it was still depreciating.

Your memory of the MB price is correct. Funny thing is that in 1992 a 500SEL would have based at around 80K, where you can get a new base S550 for around 88K today. Not much inflation for almost 20 years, and the newer car is so much better equipped it's not even funny. The Japanese kept German price inflation in line...maybe as the swoopy H will do to the Japanese.

lemko

Maybe he meant the ES250 which was just a thinly disguised Camry?

lemko

I guess that one good thing about Lexus. I bet a base S-Class couldn't be had for less than six figures today if not for the LS. Unfortunately, in trying to keep M-B prices competitive with Lexus, Mercedes went through a period where it seemed to have compromised on quality and reliability. The W126 represents the pinnacle of M-B quality and reliability. I would buy a mint-condition 1989-91 W126 in a second.

backy

60K vs 70K isn't very significant anyway, especially for the customer in that price range.

OMG. Do you have any idea what $10,000 can buy in terms of food or clothing or other necessities, in any number of countries where people desperately need those things? People who buy luxury cars do contribute to charity (at least I hope they do). It could even buy a year's tuition at a state university (or fund a nice scholarship at one, for the families that pay tuition at an Ivy League school out of petty cash). Or buy a car for that college student, or so the $70k Lexus or MB can be kept in the garage when the salt is thick on the roads (as it is today).

I guess I am not able to understand the mindset of a "luxury car" buyer, if $10,000 is not significant to them.

lemko

$10K is insignificant to maybe somebody like Bill Gates or some flashy extravagant rapper. For $10K I can still buy a very nice used car. Maybe I don't want to take my luxury ride into some bad neighborhood from which both it and myself won't return. I can buy a nice used car, (or several beaters) for that same $10K for excursions into less than desirable places.

millwood0

"60K vs 70K isn't very significant anyway, especially for the customer in that price range. "

people say that because they haven't had the (mis)fortune to buy cars in that price range.

high prices usually sound insignificant when you don't have to pay for them.

fintail

If you can realistically afford a 60K car, 10K shouldn't mean that much to you. If it does, you are shopping out of your legitimate price range.

fintail

Please read the context of my post, thank you.

Yes, 10K isn't exactly pocket change, but if you have enough hanging around to bloow 60K on a car, 70K shouldn't be a big step up for you. If it is a huge deal, you probably shouldn't be shopping in that price range at all.

Compare it to say a $60 or $70 pair of shoes. Is that $10 really going to kill you, if it gets you something you like better? I'd hope not. For some people, 10K is like $10 to you and me.

fintail

I'd bet a base S would be 120K+ if not for competition. An E would probably start at 70K as well. It's amazing a base E can be had for less than 50K today, where upon introduction for MY 1986, a normal E was 37-40K - and that car had so few frills the average poser buyer today would turn up his nose at the thought. The Japanese competition made all of this happen, and if played right the Koreans could take it a step further.

If I could find a perfect 126 coupe or sedan in a good color combo (most of these cars seem to be champagne with saddle interiors, thanks 80s tastes), I would be tempted. Good ones are getting thin on the ground.

fintail

I think those fell below the 27K claim...but you never know.

Those boxy first ES are all but extinct now. I can't recall the last time I saw one.

backy

I considered the context of your post. You didn't say (initially) that it was a matter of being able to afford the additional $10,000. You said that to buyers of $60k-70k cars, $10,000 was not very significant.

If what you said is true, then:

1) All luxury car makers should immediately raise prices at least $10,000, and/or

2) There shouldn't be discounts available on luxury cars--ever. After all, if you can afford a $50,000+ car, why would you be attracted by a few measly/insignificant thousands of bucks off MSRP?

Since I don't see #1 happening, and discounts on luxury cars are the norm, I think $10,000 is indeed significant for luxury car buyers. Except maybe those in the ultra-luxury class, e.g. Rolls and Bentley. Then we are talking several hundred thousand dollars for the car, so $10,000 is a relatively small percentage of the purchase price.

fintail

If they can really afford 60K, 10K shouldn't be significant. Like in many other sectors of the market, not all customers in that range can actually afford what they are buying.

If all makers did raise prices like that, I have no doubt the majority of buyers would still purchase.

Go try to play negotiation/discount hardball on a 70K car. You could probably get the same amount of raw dollars knocked off a loaded Camcord. Look for all the sweetheart deals and screamer ads for these cars. Not too many.

In the original post, it all comes back to the swoopy H having the possibility to do what the swoopy L did to the Germans 20 years ago. The concept is the same.

houdini1

In the original post, it all comes back to the swoopy H having the possibility to do what the swoopy L did to the Germans 20 years ago. The concept is the same.

That's what we have been telling you for the last 4,000 posts !

millwood0

"If you can realistically afford a 60K car, 10K shouldn't mean that much to you."

you know that because of WHAT?

is this another seat-of-the-pants kind of thing for you?

fintail

I've never denied it. I haven't given any criticism to the Genesis as a car, I am simply not convinced by H's promotion/marketing beliefs.

backy

What would you have done differently, promotion/marketing wise, to be more successful at selling the Genesis sedan during the worst market for cars, including luxury cars, in decades; during the worst economic downturn since the Great Depression; and considering this was Hyundai's first attempt to sell into the luxury car market (outside the ROK)?

fintail

I remain to embrace the branding strategy or selling the cars alongside Accents in dealerships that (around here anyway) have the most annoying screamer ads on TV. Some more differentiation would raise cachet, even if on a minor leveI ala Scion. don't believe the H didn't have the money to do so. Although not on the same scale, the swoopy L came around in the early days of a recession too.

backy

The branding strategy, e.g. differentiation ala Scion, is not promotion/marketing per se--more distribution. The screamer ads are not from HMA, but from individual dealerships. (I see screamer ads for other makes, from other dealers, but not many in my area--the Upper Midwest is not a good place for screamer ads.) When you see the Genesis commercials with the Jeff Bridges voice-overs, those are from HMA marketing. I don't recall Jeff screaming in any of those.

I can see the value of a Scion-type differentiation for Genesis, i.e. have some separation of Genesis-branded cars within Hyundai dealerships. That could be a good next step for Genesis. Personally I think Hyundai's promotion/marketing for Genesis was excellent, given the circumstances. What I think should have done better was not re promotion/marketing, but in preparing their dealers to sell the Genesis. There was training of course, but I think Hyundai should have been more selective about which dealers were allowed to carry the Genesis--make them earn the right to do that by demonstrating a history of exceptional customer service and achieving rather stringent education goals, for sales and service. Then keep close eye on the dealers selling the Genesis to ensure they continue to provide exceptional customer service. There might also have been some standards set re the dealership facilities--those dealers with rinky-dink facilities would not qualify to sell the Genesis.

fintail

Scion tried to be different from dull Toyota...in enthusiast eyes it isn't, but I suspect there's more differentiation in the eyes of Joe or Jane Sixpack. I don't see many Genesis-specific TV ads...I am not a huge TV watcher, but there are a couple local Hyundai dealers with pretty idiotic ads. I don't see the local Lexus/Infiniti/Acura dealers doing the same, and commercials from the local German dealers are very rare in any form.

That's a good idea too...let the Genesis be available at select dealerships, ones known for good service and facilities. Make the car a status symbol for dealers, and make them work to keep it. The dealer/salesperson then gets more sales and more profit, and the brand gets better dealers.

rodger12

I won't consider a "throw-away" everyday Hyundai. Why would I pay more for a Korean POS car? If I want a Luxury vehicle I'll buy MB, BMW, or Cadilac. The rest are poser mobiles.

bobad

I've never denied it. I haven't given any criticism to the Genesis as a car, I am simply not convinced by H's promotion/marketing beliefs.

If you're fixated on the badge rather than what really counts (the car), you never will be convinced. That makes all future conversation totally predictable.