Don't be ridiculous. Finding costs is not an easy job even for a field expert. and don't believe that your guess is right.
Do you happen to know how efficient a new automobile plant can be compared to an old plant? the answer is a lot. Don't calculate with your biased information.
Please no more about making a profit on Hyundai's made here in the US. The plant is still on it's learning curve; it is not up to capacity
That plant has been running full tilt for nearly 1-1/2 years. It may be the most automated plant of its kind in the world. The plant was designed and built specifically to turn out cars that match the competition in quality, but at a much lower cost. Robots work cheap, and do not call in sick. Build quality from the Montgomery plant is excellent by all accounts, and has been right from the start. Those are the facts. The statement "The Ala plant is still a baby learning to stand up" was dreamed up in a vivid imagination. It's pure conjecture, and pretty amusing actually.
I don't see this being addressed. Anyone concerned about the scandal and jailing of the Chairman, Chung Mong Koo. How about if you buy a Hyundai, you are potentially funding the North Koreans?
I don't mean to make this a political thing, but it isn't looking good.
This green belt would disagree. It was an American company that I worked at when I began my Six Sigma program (Andrew Corporation) and worked under Master Black belts on many projects. Many companies are moving in that direction, and the Fed is doing it as well. There are even references to requirements in Federal solicitations for certain positions to have a certain level of Six Sig to qualify (pre-requisite). Let us not forget that is was created by Motorola (an American company) and has been adopted by the likes of Ford, Caterpillar, Microsoft, Raytheon, Quest Diagnostics, Seagate Technology, Siemens, Merrill Lynch, Lear, 3M and many more.
This is not the right place to address that issue. Try the Automotive News & Views board. If there isn't an appropriate discussion underway, feel free to start a new one.
Folks, we're comparing the actual cars here. I understand that some of these other issues are bound to come up, but there is a whole board dedicated to those conversations. See the link in my post just prior to this one.
Let's stick to comparing the features and attributes of the individual cars here - that's what we're here for.
six sigma was created by an american company motorola?
where in heavens are did you get this info? first motorola is not even an american company, its scandanavian and second the it was a japanese company that created this quality assurance testing method.
And yes after a while now usa companies have finally tried to implemented in their autos.
The koreans have actually created their own version of six sigma some years ago(infracture for internet, samsung, hyundai), which actually goes ahead a step or two of the six sigma
And lastly kdhspyder, you amaze me sometime with your ability to act like you know. The alabama plant is one of the highest tech plant in the world. Everything is alot more automated, the machines are still considered all brand new, so it doesn't take a genius to press a button(plus the employees are half korean professionals plus european engineers etc, and the other half are highly qualified americans, some even probably former hondayota, gm employees). It also has one of the best painting shops for a plant.
The full black interior shown, is said to make its way to the NA market and it could be an option or std for all sonatas from a auto korean article. In korea the black upgraded interior(a little bit more fancy attention to detail on buttons etc), are not common mostly on limited edition sonatas.
There will be some more color options too, in addition to nav system, active geometry suspension option, more silver chromings above the bumpers of the doors and all around, more std options even on base( i can't imagine what more they can give the public on the base)
I'd be happy to discuss with you privately regarding this issue since this is not exactly the correct forum. What I can tell you here, Hyundai is not losing $4,500 per each Sonata sold. With all due respect, your logic makes absolutely no sense since cost structures vary greatly between automakers; further, it is an incorrect assumption to simply subtract $6,000 just because that's how much higher Toyota/Honda charge their customers.
As for the Alab. plant, here is a direct quote from a Bloomberg article:
"The Alabama plant is so automated and uses so many modules from Hyundai Mobis that it's expected to employ 2,000 workers to make 300,000 vehicles annually. That's half as many people as Honda needed to build the same number of cars at its factory in Lincoln, Alabama."
You write as if Hyundai discoverd robots on the production line. Be real. Georgetown, Marysville and Smyrna are always ranked at the top in efficiency. You really have no idea of what you are speaking if you think the just crawling Ala plant is as efficient as the top three transplants.
Kaizen is Japanese in origin, but Moto originated the relabeling to Six Sigma of their Quality Model practices from the 1980's. Six Sigma, as we know it in the states, began there. I did not state it was the origin of TQM or SPC/SQC. Bill Smith at Motorola USA is widely credited with the origin of 6 Sig. Google it if you don't beleive me. I would have taken this offline, but I have no way to contact you.
And as for Moto being Scandinavian, are you kidding? It was founded in 1928 as Galvin Manufacturing in Chicago. That is like saying that Ericsson is Candian, HAH.
In that case, I've heard of everything - Toyota can do no wrong. Praise Lord Toyota
On a serious note, have a visit to the Alab. plant, then you would witness firsthand the automation process that everyone is touting about. I was truly amazed during my visit.
Sorry no go on this. I know the price of steel, plastic and glass. I was an automotive supplier for 20+ years and I know the prices of raw materials. They are the same for every automaker within a few points.
If the price of the basic material is the same and the price to build a brand new plant is much higher than to use a preexisting plant ( amortization ) and the cost of services and equipment is the same; welding wire, robots, gas, electricity, water, etc. Until you get to actual assembly the basic cost of the vehicles are all about the same. Hyundai may even be at a slight disadvantage due to the high cost of it's new buildings etc. But let's say that they are equal.
The only 'variable' then is the cost of assembly. To show you how silly your argument is I am going to use your figures for manpower.
If as you say Hyundai can assemble 300,000 vehicles with 2000 employees in a given year ( 2000 manhours a yr ) versus Honda which might need 4000 employees to do the same work here is the math.
Hyundai: 2000 employees X 2000 hrs /yr is 4,000,000 manhours annually... divided by 300,000 units equals... 13.33 manhours / verhicle at say $40/hr with all benefits. That's a labor cost of : $533 per vehicle
Honda: If Honda uses 4000 employees to get out the same 300,000 vehicle with the same cost for labor then it costs them : $1066 per vehicle
The biggest advantage Hyundai could have using your figures is about $500. This assumes that the new workers are equal to Honda's. This is not at all certain no matter what you state over and over. Example the new Nissan plant in Miss is the worst quality plant in the US. Why? The workers there have no idea how to run the complex machinery. There is a huge learning curve. To assume that the Ala plant is world class from day one is blind optimism. It's a good trait but not realistic.
Summary: Basic materials for all makers cost the same; Basic services for all makers cost the same; Plant fixed costs are higher for newer plants than for older plants; Assembly productivity is better for new plants; costs are lower. But the difference as shown above is small.
Ergo: The cost of building a new vehicle at one of the well-established nonunion transplants is about the same.
BTW. As an automotive supplier this type of analysis was/is done all the time for every plant. It's how the suppliers get an idea how much they can charge for their products and services.
Conclusion: A) C) A) HonYotaNiss are making 'normal' profits per vehicle ( abt $1500 ) but selling @ $6000 higher prices than Hyundai thus Hyundai is making about $4500 loss per vehicle. My own opinion. HonYotaNiss are making HUGE profits per vehicle ( about $7000 !!! ) and Hyundai is making a 'normal' profit of about $1000 per vehicle. My business sense tell me this is not correct. There isn't that much margin in a midsized vehlcle. Big SUV's? Yes, certainly. C) Something in the middle
Here is a comment from a customer: "I am so disappointed in Toyota. I've had previous first-year vehicles, but nothing like this ever happened. Toyota's build quality has declined in recent years, and there seems to be nothing the dealer can do. Toyota has reached a size that they've lost sight of the individual customer."
Anita Lam, data program manager for Consumer Reports' auto test center, said problems with the Avalon cropped up in steering, suspension and body integrity.
Kevin Clingenpeel, a 37-year-old insurance litigator from Fort Mill, S.C., loved his Avalon for the first 2,000 miles. Then the transmission shifts became erratic, especially in cold weather. The engine developed a persistent knock, which could not be cured by changing grades of gasoline or by using a fuel-injector cleaner.
I just had a $1083 replacement of an air-fuel ratio sensor (oxygen sensor) on 2002 ES300 with 60000 miles because Toyota's oxygen sensor was fused on the mainfold. What a poor engineering!
You write as if Hyundai discoverd robots on the production line. Be real. Georgetown, Marysville and Smyrna are always ranked at the top in efficiency. You really have no idea of what you are speaking if you think the just crawling Ala plant is as efficient as the top three transplants.
Hyundai did not discover robots, and I did not imply they did. However, Hyundai manufactures robots (unlike some other car makers I know!) I bet T&H wish they could buy Hyundai robots and robot technology at cost!
Be careful with efficiency figures. I think they are based on cars produced per human hours worked. An extremely high percentage of robots can badly skew the efficiency figures, or even make them meaningless.
You really need to flesh out the "just crawling Ala plant" with some facts. Just saying it or speculating on it doesn't make it so. Sometimes a rookie comes into the league and sets a new standard for the old players.
Hey kdhspyder, if you are inferring that I dislike Accord, Camry, Fusion, Altima, or Sonata, you couldn't be more wrong. I have the highest regard for all those cars, and would be happy as a clam to own any of them.
Here is my basic interest. It has nothing to do with cars at all. While I was an automotive supplier for about 20 yrs as VP of a steel maker I am more interested in the business mode.
It intrigues me that so many Hyundai supporters think that the company has discovered the secret for ultra low cost production and that the present low prices are a normal and natural situation. I know that all automakers have the same basic costs ( excluding the union effect or a new start up like Nissan, MS ) so all the vehicle cost the same.
T break into a market a company often has to buy it's way in. However at sometime the top people put a stop and say 'We have made an effort to buy market share so now we have to make a profit on our investment.'
Hyundai is not a charitable organization to benefit the US consumer. It's just like any other business it wants to make as much profit as possible. Right now I would bet that the difference in cost to produce a Camry vs an Accord vs a Sonata vs an Altima is less than $1000 per unit. Hyundai is selling @$6000 less than the other 3 as noted so many times here. The math is easy.
I am THRILLED that upon arriving in Milwaukee this week, Hertz had a beautiful pearl white Azera waiting for me. I've only had it for 20 miles so far, but this is an incredible vehilce. The interior mitigates almost all my reservations with the disjointed look of the Sonata (perhaps that should be expected for an extra $5k), but I'm impressed. The powertrain is phenomenal, the vehicle literally sails up to speed, and I'm very impressed with shift quality and precision, more so than in the Sonata GLS 3.3L/5A that I had as rental recently.
Be careful with efficiency figures. I think they are based on cars produced per human hours worked. An extremely high percentage of robots can badly skew the efficiency figures, or even make them meaningless.
Note that I just used the total employee figure joe97 posted from the article ( which was just a factoid written by the Bloomber writer - who may know nothing about accounting and cost of production ).
It doesnt matter if robots make 299,999 units at zero cost of labor and 2000 total employees working all year make one vehicle, the total labor cost remains the same. The artice purportedly implies that because of the use of robots and new efficiency practices that the Hyundai plant can use 2000 less human workers to make the same vehicles.
This is the same thing you said.
However as the math shows this saving is at most about $500. It's significant but it doesnt' explain a $6000 difference in selling prices.
Again, we need to talk about the cars here, not these other issues.
You folks are having a good conversation, it's just in the wrong place. I don't want to remove these posts, but if they don't stop I will have to. People who are trying to talk about cars are getting lost in the numbers of off-topic posts.
I think your post represents oversimplification, and does not provide a background.
I'm not making excuses for the first year quality of the Avalon, however, it is fairly typical for CR to note a Reliability rating decrease in the first year of production of most new models. Indeed, for most of Honda and Toyota's redesigns, reliability has slipped to 'Average', only to return to 'Better Than Average' or 'Much Better than Average' in subsequent years.
You left out this quote from the same article, by Anita Lam of CR "These are first-year teething problems. We anticipate the second model year will be much better," Lam said.
The article sites the rapid growth of TMMK as a potential problem, and that indeed seems to be the case. But, according to the article, several measures have been taken to bolster quality back to Toyota's high standards. We shall see what the 2006 MY holds for Toyota's Avalon, in terms of the CR Reliability rating.
Question- did you have to pay for that air-fuel sensor repair? Shouldn't you have still be in warranty?
To be honest I've never been crazy about the malibu's interior either. But its better than the Sonata. What car has a really nice dash is the Impala with the aluminum trim. My mother has one and its a sharp looking car inside and out.
The Malibu interior suffers from what most other gm interiors suffer from, which is a lack of quality materials, quality switchgear and a general lack of style. The Sonata does utilize quality materials, workmanship and switchgear. I dont think the malibu's interior can hold a candle to the sonata's. And you say the impala has a nice interior. wow.!! the one i was in was auwful, did chevy forget to put markings on the gear shift lever, that has got to be the worst cost cutting measure ive ever seen. The gear shift lever is just black plastic. horrible.
Your conclusion C is correct "something in the middle". Margin on NA Sonatas actually is slightly more than previous generations, which all were imported from home market [South Korea].
I don't mind either. The interior of the Sonata works because it is inoffsensive and easy for the eyes. Of course, improvements are needed, just like every other model, and that's what refreshes are for.
which belong on the Automotive News board have been removed. We're talking about cars here. Opinions about the strategies and current states of various manufacturers may be pursued there, but they don't belong here.
Sounds like you know more than CEOs of car manufacturers about profit details. Know more about Korea than a guy read Korean newspapers written in Korean.
Prove it then, instead of writing page long analysis over and over. You can say whatever you want to, but I don't want people get incorrect information. If you can't prove it, make sure put the word "Theory" at the end of the post.
A company losing money by selling cars will add another 1.5 Billion dollars facility ( New Kia) in the USA? WOW! That makes sense :confuse:
Many of Hyundai's tier one suppliers are not US based; further, your assumption of the basic cost structure being about the same across the line is generalization without taking into effect the specifics. Many of tier one suppliers for Hyundai came with the automaker when the plant is built. You would find these suppliers located nearby to the HMMA plant.
If Hyundai designs every generation of the Sonata to loose money - disclaimer - using your assumption the cost structure being the same across automakers while Hyundai undercuts competitions, then the Sonata would not even be around now.
The truth is that it was hyundais phase one aspect of new interior making(fine job as in tightness aspect, quality materials), and maybe it tried to be too original, too greedy to make the inteior too spacy in sacrifice of the design. The color needs a little tweeking also. I really love the all black with red stitching, which can supplement the design "too original" nitpick drawback. Still it is inoffensive, functional, quality, tight unlike many other autos
Hyundai can absolutely make some badass interior proven by the azeras(just amazing in my opinion, for its price of not) and the new santa fe and elantra are implemented with hyundais newer interior design philosophy, the next sonatas interior should be a home run
Boy there has been alot written on the Sonata interior. I would agree that it is not an issue with materials but execution. It looks like it could use a little more WOW factor. I recently sat in an '06 outback and think they did a pretty good job with execution. One thing you can tell from comparing the '05 to '06 Sonata however - this is a company that learns fast.
Arent Toyota recalls/TSB's up considerably also? Someone posted a link showing this. I never read anything in the paper or heard it on the news. If this would have been GM/Ford it would have been plastered all over the internet and the news.. for doggone sure...
From one poster to another you all are being inconsiderate. I have been on many Edmunds forums that have been shut down because people refused to get back on the subject. I, myself, have been guilty of deviating, but I refrain once the moderator says something because I do not want to be the one to cause the forum to be shut down. This forum, though Sonata fan heavy, is a good one with good conversations like why the Malibu interior should be illegal. Just show some respect to the other people in here.
I told you all about my baby! Were there any doubts? I kept trying to tell you all that my baby, I call her Kesha, was everything she needed to be and more. But you wouldn't believe so she had to show you all up.
Case you didn't recognize, I am talking about my Mazda6.
They said that the Mazda was a car you'd give a name and keep long after it is paid off.
I gave Kesha her name since day one. I won't be keeping her that long. I am thinking of trading her in for a CX-7 named Shonda. I'm a player, I know.
These stats should be interesting as April has been a good month for most makers. I wonder if Hyundai is having problems moving the Sonata's.
Radio ad heard today. 'Sonata's at $12980!!!' Is this lower than Civics and Corolla's? Couldn't be true, the Sonata is a raging success. It's going to pass the Camry and Accord - but it sells for less than the Corolla and Civic? That's embarrassing. I'm glad that I didn't buy a Sonata at $15,980 before.
This strategy seems familiar from the recent past. Ahhh it was GM last year. "Huge rebates!" "Buy one and get a second for $1" "Employee pricing""
This strategy put GM near bancruptcy. Hyundai seems to be benchmarking GM in it's marketing strategy.
BTW, this $12980 price while good for the current buyer destroys the value of all Sonata's which were purchased in the last 12 months.
Someone's true colors and feelings towards Honda and Toyota are showing true...everyone is biased, but that's quite a statement you made. Did HonYota put you out THAT bad?
You gotta consider how what you just said sounded to the outside listener. Its like me saying I'm excited because the A student that all the teachers love got a C in his basket-weaving class. The class (magazine) has no real bearing in the real world of cars, but you were excited to see it fail anyway. Just sounds wierd.
Maybe I'll celebrate a Hyundai failure? Nah...that wouldn't make any sense, because the better a competitor becomes, the more pressure that lies on other companies to improve their cars, too.
No think about if you paid $21K when the car first came out. How much do you really think you could resell that car for right now???? Or what if you paid 18K two months after it came out, or 15K up til last month?
Think about the resale value, are you as a consumer going to buy a car at $16K , (24% less than the $21K figure and 11% less than the $18K figure) when you can get it brand new for $3K less???? You may,... and I'd tell you, you need a stupid sign.
I want to see the Sonata worshipers after they come from Hyundai mass defend this one. Is this offset because you spend more for a Toyota in the first place. Is 38% depreciation reasonable in under nine months of ownership???
I apologize in advance, I will say I am sorry five times to the next Sonata I see on the road.
Edmunds has the TradeIn value of a 2005 Sonata GL 4c AT with 12000 mi at $10500!
Please don't tell me anyone paid $17 or $18K for a Sonata last year. Hyundai is back copying GM again by destroying the value of the recent purchases. A recent buyer better love his/her Sonata to death because it will be with them for the life of the loan.
This doesn't seem very respectful to recent purchasers.
The local dealer I went to last year had newspaper ads offering unbelievable prices. Yes they were truly "unbelievable." Advertised price included all rebates then available, including military, college grad and owner loyalty. Pow, add $1900 on to the price. Then add dealer fee of $398.50 and about $100 for processing transfer of registration and title ($100 above the fees paid to the state). Also had to add $500 advertising fee. His price for the car (before tax) was about $3000 higher than the ad.
I told you all about my baby! Were there any doubts? I kept trying to tell you all that my baby, I call her Kesha, was everything she needed to be and more. But you wouldn't believe so she had to show you all up.
I know you're mostly kidding about your love and affection for a mere machine, but I guess you are only half kidding. I just can't get all misty and emotional about a car. I do like the Mazda6. It handles very nice, and the styling is good. After a good long ride, I was starting to feel a bit bruised. The Sonata doesn't give up much handling or styling,and actually felt like the engine is stronger.
"The Sonata doesn't give up much handling or styling,and actually felt like the engine is stronger."
Here we go again. The Mazda6 has been rated the best looking mid sized sedan and every comparison it is in it is always the car selected as "the one that makes driving fun" and "the best looking out of the group". Edmunds said that the six was the only car in a seven car comparo that they "would make an excuse to go and drive". No one has said anything even remotely similar to the Sonata. In fact when Edmunds did a comparo between the Fusion and the Sonata, they praised the Fusion for being far ahead of any of the rest in terms of handling. The Fusion is based on the Mazda6 and the Mazda6 is the better handler!!! It has been said that you can't buy a car under $30K with the driving dynamic, the handling, and the steering accuracy of the Mazda. Mazda benchmarked a 3 Series. The Sonata gives up A TON when it comes to handling and driving feel. It drives like a Camry. That is what Hyundai made it to do. Sure you sacrifice things in the Mazda, ride quality, space, horsepower, features, BUT handling is not one of them. I drive a Mazda6 every day and the ride is as firm as a BMW. It is not abusive at all. It is just not as soft as a Camry or Sonata and it isn't meant to be. It is meant to cater to a sport performance niche and it does. The Sonata can not compete with it fairly because it isn't designed to. Likewise, the Mazda6 can't compete with the Sonata fairly because it isn't designed to be your common everyday person's misive sedan.
Sorry for the rant my friend but Kesha is dear to my heart. I drove and considered buying a Sonata. My biggest problem with the car is that I could drive it but I could never fall in love with it. It doesn't have a soul to me. The Mazda6, definitely has a personality which is why I'd buy a Mazda all over again.
Comments
Finding costs is not an easy job even for a field expert. and don't believe that your guess is right.
Do you happen to know how efficient a new automobile plant can be compared to an old plant? the answer is a lot. Don't calculate with your biased information.
That plant has been running full tilt for nearly 1-1/2 years. It may be the most automated plant of its kind in the world. The plant was designed and built specifically to turn out cars that match the competition in quality, but at a much lower cost. Robots work cheap, and do not call in sick. Build quality from the Montgomery plant is excellent by all accounts, and has been right from the start. Those are the facts. The statement "The Ala plant is still a baby learning to stand up" was dreamed up in a vivid imagination. It's pure conjecture, and pretty amusing actually.
I don't mean to make this a political thing, but it isn't looking good.
This green belt would disagree. It was an American company that I worked at when I began my Six Sigma program (Andrew Corporation) and worked under Master Black belts on many projects. Many companies are moving in that direction, and the Fed is doing it as well. There are even references to requirements in Federal solicitations for certain positions to have a certain level of Six Sig to qualify (pre-requisite). Let us not forget that is was created by Motorola (an American company) and has been adopted by the likes of Ford, Caterpillar, Microsoft, Raytheon, Quest Diagnostics, Seagate Technology, Siemens, Merrill Lynch, Lear, 3M and many more.
Let's stick to comparing the features and attributes of the individual cars here - that's what we're here for.
where in heavens are did you get this info? first motorola is not even an american company, its scandanavian and second the it was a japanese company that created this quality assurance testing method.
And yes after a while now usa companies have finally tried to implemented in their autos.
The koreans have actually created their own version of six sigma some years ago(infracture for internet, samsung, hyundai), which actually goes ahead a step or two of the six sigma
And lastly kdhspyder, you amaze me sometime with your ability to act like you know. The alabama plant is one of the highest tech plant in the world. Everything is alot more automated, the machines are still considered all brand new, so it doesn't take a genius to press a button(plus the employees are half korean professionals plus european engineers etc, and the other half are highly qualified americans, some even probably former hondayota, gm employees). It also has one of the best painting shops for a plant.
There will be some more color options too, in addition to nav system, active geometry suspension option, more silver chromings above the bumpers of the doors and all around, more std options even on base( i can't imagine what more they can give the public on the base)
As for the Alab. plant, here is a direct quote from a Bloomberg article:
"The Alabama plant is so automated and uses so many modules from Hyundai Mobis that it's expected to employ 2,000 workers to make 300,000 vehicles annually. That's half as many people as Honda needed to build the same number of cars at its factory in Lincoln, Alabama."
And as for Moto being Scandinavian, are you kidding? It was founded in 1928 as Galvin Manufacturing in Chicago. That is like saying that Ericsson is Candian, HAH.
On a serious note, have a visit to the Alab. plant, then you would witness firsthand the automation process that everyone is touting about. I was truly amazed during my visit.
If the price of the basic material is the same and the price to build a brand new plant is much higher than to use a preexisting plant ( amortization ) and the cost of services and equipment is the same; welding wire, robots, gas, electricity, water, etc. Until you get to actual assembly the basic cost of the vehicles are all about the same. Hyundai may even be at a slight disadvantage due to the high cost of it's new buildings etc. But let's say that they are equal.
The only 'variable' then is the cost of assembly. To show you how silly your argument is I am going to use your figures for manpower.
If as you say Hyundai can assemble 300,000 vehicles with 2000 employees in a given year ( 2000 manhours a yr ) versus Honda which might need 4000 employees to do the same work here is the math.
Hyundai: 2000 employees X 2000 hrs /yr is 4,000,000 manhours annually...
divided by 300,000 units equals... 13.33 manhours / verhicle at say $40/hr with all benefits.
That's a labor cost of : $533 per vehicle
Honda: If Honda uses 4000 employees to get out the same 300,000 vehicle with the same cost for labor then it costs them : $1066 per vehicle
The biggest advantage Hyundai could have using your figures is about $500. This assumes that the new workers are equal to Honda's. This is not at all certain no matter what you state over and over. Example the new Nissan plant in Miss is the worst quality plant in the US. Why? The workers there have no idea how to run the complex machinery. There is a huge learning curve. To assume that the Ala plant is world class from day one is blind optimism. It's a good trait but not realistic.
Summary:
Basic materials for all makers cost the same;
Basic services for all makers cost the same;
Plant fixed costs are higher for newer plants than for older plants;
Assembly productivity is better for new plants; costs are lower. But the difference as shown above is small.
Ergo: The cost of building a new vehicle at one of the well-established nonunion transplants is about the same.
BTW. As an automotive supplier this type of analysis was/is done all the time for every plant. It's how the suppliers get an idea how much they can charge for their products and services.
Conclusion: A)
A) HonYotaNiss are making 'normal' profits per vehicle ( abt $1500 ) but selling @ $6000 higher prices than Hyundai thus Hyundai is making about $4500 loss per vehicle. My own opinion.
C) Something in the middle
Here is a comment from a customer:
"I am so disappointed in Toyota. I've had previous first-year vehicles, but nothing like this ever happened. Toyota's build quality has declined in recent years, and there seems to be nothing the dealer can do. Toyota has reached a size that they've lost sight of the individual customer."
Anita Lam, data program manager for Consumer Reports' auto test center, said problems with the Avalon cropped up in steering, suspension and body integrity.
Kevin Clingenpeel, a 37-year-old insurance litigator from Fort Mill, S.C., loved his Avalon for the first 2,000 miles. Then the transmission shifts became erratic, especially in cold weather. The engine developed a persistent knock, which could not be cured by changing grades of gasoline or by using a fuel-injector cleaner.
I just had a $1083 replacement of an air-fuel ratio sensor (oxygen sensor) on 2002 ES300 with 60000 miles because Toyota's oxygen sensor was fused on the mainfold. What a poor engineering!
Watch out before buying a Toyota!
Hyundai did not discover robots, and I did not imply they did. However, Hyundai manufactures robots (unlike some other car makers I know!) I bet T&H wish they could buy Hyundai robots and robot technology at cost!
Be careful with efficiency figures. I think they are based on cars produced per human hours worked. An extremely high percentage of robots can badly skew the efficiency figures, or even make them meaningless.
You really need to flesh out the "just crawling Ala plant" with some facts. Just saying it or speculating on it doesn't make it so. Sometimes a rookie comes into the league and sets a new standard for the old players.
Hey kdhspyder, if you are inferring that I dislike Accord, Camry, Fusion, Altima, or Sonata, you couldn't be more wrong. I have the highest regard for all those cars, and would be happy as a clam to own any of them.
It intrigues me that so many Hyundai supporters think that the company has discovered the secret for ultra low cost production and that the present low prices are a normal and natural situation. I know that all automakers have the same basic costs ( excluding the union effect or a new start up like Nissan, MS ) so all the vehicle cost the same.
T break into a market a company often has to buy it's way in. However at sometime the top people put a stop and say 'We have made an effort to buy market share so now we have to make a profit on our investment.'
Hyundai is not a charitable organization to benefit the US consumer. It's just like any other business it wants to make as much profit as possible. Right now I would bet that the difference in cost to produce a Camry vs an Accord vs a Sonata vs an Altima is less than $1000 per unit. Hyundai is selling @$6000 less than the other 3 as noted so many times here. The math is easy.
Do the two share the same transmission?
More to come...
~alpha
Note that I just used the total employee figure joe97 posted from the article ( which was just a factoid written by the Bloomber writer - who may know nothing about accounting and cost of production ).
It doesnt matter if robots make 299,999 units at zero cost of labor and 2000 total employees working all year make one vehicle, the total labor cost remains the same. The artice purportedly implies that because of the use of robots and new efficiency practices that the Hyundai plant can use 2000 less human workers to make the same vehicles.
This is the same thing you said.
However as the math shows this saving is at most about $500. It's significant but it doesnt' explain a $6000 difference in selling prices.
You folks are having a good conversation, it's just in the wrong place. I don't want to remove these posts, but if they don't stop I will have to. People who are trying to talk about cars are getting lost in the numbers of off-topic posts.
Here's the link again: Automotive News & Views.
Thanks for your cooperation.
I'm not making excuses for the first year quality of the Avalon, however, it is fairly typical for CR to note a Reliability rating decrease in the first year of production of most new models. Indeed, for most of Honda and Toyota's redesigns, reliability has slipped to 'Average', only to return to 'Better Than Average' or 'Much Better than Average' in subsequent years.
You left out this quote from the same article, by Anita Lam
of CR "These are first-year teething problems. We anticipate the second model year will be much better," Lam said.
The article sites the rapid growth of TMMK as a potential problem, and that indeed seems to be the case. But, according to the article, several measures have been taken to bolster quality back to Toyota's high standards. We shall see what the 2006 MY holds for Toyota's Avalon, in terms of the CR Reliability rating.
Question- did you have to pay for that air-fuel sensor repair? Shouldn't you have still be in warranty?
~alpha
What car has a really nice dash is the Impala with the aluminum trim. My mother has one and its a sharp looking car inside and out.
And you say the impala has a nice interior. wow.!! the one i was in was auwful, did chevy forget to put markings on the gear shift lever, that has got to be the worst cost cutting measure ive ever seen. The gear shift lever is just black plastic. horrible.
malibu or impala can't do this.
i'll take this interior over malibu or impala.
(Gee, I'm tired of hearing myself say that! :-))
Know more about Korea than a guy read Korean newspapers written in Korean.
Prove your theory!
You can be nice, it's not difficult.
You can say whatever you want to, but I don't want people get incorrect information.
If you can't prove it, make sure put the word "Theory" at the end of the post.
A company losing money by selling cars will add another 1.5 Billion dollars facility ( New Kia) in the USA?
WOW! That makes sense :confuse:
If Hyundai designs every generation of the Sonata to loose money - disclaimer - using your assumption the cost structure being the same across automakers while Hyundai undercuts competitions, then the Sonata would not even be around now.
Hyundai can absolutely make some badass interior proven by the azeras(just amazing in my opinion, for its price of not) and the new santa fe and elantra are implemented with hyundais newer interior design philosophy, the next sonatas interior should be a home run
Have you sat in a azera yet?? its very european in taste, very well executed, doesn't even need a wow factor
Case you didn't recognize, I am talking about my Mazda6.
They said that the Mazda was a car you'd give a name and keep long after it is paid off.
I gave Kesha her name since day one. I won't be keeping her that long. I am thinking of trading her in for a CX-7 named Shonda. I'm a player, I know.
Radio ad heard today. 'Sonata's at $12980!!!' Is this lower than Civics and Corolla's? Couldn't be true, the Sonata is a raging success. It's going to pass the Camry and Accord - but it sells for less than the Corolla and Civic? That's embarrassing. I'm glad that I didn't buy a Sonata at $15,980 before.
This strategy seems familiar from the recent past. Ahhh it was GM last year.
"Huge rebates!"
"Buy one and get a second for $1"
"Employee pricing""
This strategy put GM near bancruptcy. Hyundai seems to be benchmarking GM in it's marketing strategy.
BTW, this $12980 price while good for the current buyer destroys the value of all Sonata's which were purchased in the last 12 months.
You gotta consider how what you just said sounded to the outside listener. Its like me saying I'm excited because the A student that all the teachers love got a C in his basket-weaving class. The class (magazine) has no real bearing in the real world of cars, but you were excited to see it fail anyway. Just sounds wierd.
Maybe I'll celebrate a Hyundai failure? Nah...that wouldn't make any sense, because the better a competitor becomes, the more pressure that lies on other companies to improve their cars, too.
No think about if you paid $21K when the car first came out. How much do you really think you could resell that car for right now???? Or what if you paid 18K two months after it came out, or 15K up til last month?
Think about the resale value, are you as a consumer going to buy a car at $16K , (24% less than the $21K figure and 11% less than the $18K figure) when you can get it brand new for $3K less???? You may,... and I'd tell you, you need a stupid sign.
I want to see the Sonata worshipers after they come from Hyundai mass defend this one. Is this offset because you spend more for a Toyota in the first place. Is 38% depreciation reasonable in under nine months of ownership???
I apologize in advance, I will say I am sorry five times to the next Sonata I see on the road.
Please don't tell me anyone paid $17 or $18K for a Sonata last year. Hyundai is back copying GM again by destroying the value of the recent purchases. A recent buyer better love his/her Sonata to death because it will be with them for the life of the loan.
This doesn't seem very respectful to recent purchasers.
I've sat in, and driven, the Azera. It definitely doesn't have ANY wow factor. Total OKness. Unaffending, yet unispiring (like a house merlot).
Like the guy in USA Today said "just remove the slanted H from the car" and you'll be good ....
Did I really just post this on the Edmundsonata board? Doesn't Hyundai own Edmunds? I think they do in some permutated fashion.
The local dealer I went to last year had newspaper ads offering unbelievable prices. Yes they were truly "unbelievable." Advertised price included all rebates then available, including military, college grad and owner loyalty. Pow, add $1900 on to the price. Then add dealer fee of $398.50 and about $100 for processing transfer of registration and title ($100 above the fees paid to the state). Also had to add $500 advertising fee. His price for the car (before tax) was about $3000 higher than the ad.
I know you're mostly kidding about your love and affection for a mere machine, but I guess you are only half kidding. I just can't get all misty and emotional about a car. I do like the Mazda6. It handles very nice, and the styling is good. After a good long ride, I was starting to feel a bit bruised. The Sonata doesn't give up much handling or styling,and actually felt like the engine is stronger.
Please don't tell me anyone paid $17 or $18K for a Sonata last year."
Err... you do realize that the 2005 Sonata was the previous generation Sonata, in its last year of an 8 year run.
NO ONE in his right mind paid $17/18K for a 2005 Sonata GL 4c AT last year. You could have gotten those easily for $13k brand new last year.
We all know that the Sonata's resale is not as good as the resale leader Accord, but let's not exaggerate to make a point.
You may be on to something there.......
Here we go again. The Mazda6 has been rated the best looking mid sized sedan and every comparison it is in it is always the car selected as "the one that makes driving fun" and "the best looking out of the group". Edmunds said that the six was the only car in a seven car comparo that they "would make an excuse to go and drive". No one has said anything even remotely similar to the Sonata. In fact when Edmunds did a comparo between the Fusion and the Sonata, they praised the Fusion for being far ahead of any of the rest in terms of handling. The Fusion is based on the Mazda6 and the Mazda6 is the better handler!!! It has been said that you can't buy a car under $30K with the driving dynamic, the handling, and the steering accuracy of the Mazda. Mazda benchmarked a 3 Series. The Sonata gives up A TON when it comes to handling and driving feel. It drives like a Camry. That is what Hyundai made it to do. Sure you sacrifice things in the Mazda, ride quality, space, horsepower, features, BUT handling is not one of them. I drive a Mazda6 every day and the ride is as firm as a BMW. It is not abusive at all. It is just not as soft as a Camry or Sonata and it isn't meant to be. It is meant to cater to a sport performance niche and it does. The Sonata can not compete with it fairly because it isn't designed to. Likewise, the Mazda6 can't compete with the Sonata fairly because it isn't designed to be your common everyday person's misive sedan.
Sorry for the rant my friend but Kesha is dear to my heart. I drove and considered buying a Sonata. My biggest problem with the car is that I could drive it but I could never fall in love with it. It doesn't have a soul to me. The Mazda6, definitely has a personality which is why I'd buy a Mazda all over again.
...something about a dumb hoodlum. "... was doomed to fail. The getaway car was a Hyundai."
Poor Hyundai's previous reputation still a matter of jokes. Oh well. Maybe someday!