Is There Room in the Luxury Market for Hyundai?

stever · July 2007

Would you buy a luxury version of a Hyundai?

gagrice · July 2007

If they offered the Veracruz with a diesel engine it would get my attention. I was going to look at one and they were sold out. I think the Motor Trend face off with the RX350 was a brilliant move on Hyundai's part. Why not go after the top seller in the class?

I also think the Azera from the outside is better looking than the competition. I will check them out when they get a Veracruz in for a test drive.

drfill · July 2007

I'll make this work, but your not helping me.

Now I have to repost the start. :confuse:

DrFill

drfill · July 2007

Hyundai ain't in Lexus' class?!? :surprise:

They need to pony up some cash, and step into the major leagues.

They obviously don't want anything to do with Lexus.

Can they handle Acura? Infiniti? :confuse:

DrFill

stever · July 2007

Ok, we know you aren't in the market for a Hyundai.

Anyone else care to comment on whether they'll darken the door of a Hyundai dealership?

joe97 · July 2007

There is room but one with no margin for error. Hyundai has to do it right out of the gate or don't do anything.

That said, I have my eye on the RWD luxury sedan. Saw the near production concept at NYIAS up close and in person. I will defn. be having a tough look next year when it debuts.

Steve, maybe add the Azera to the list?

joe97 · July 2007

The latest I am hearing, the Veracruz diesel should be the first Hyundai in the US with the diesel option, sometimes in 2009 I think.

gagrice · July 2007

I don't think they are ready for a separate dealer network. The expense would be too great. I think letting the public know you can get a luxury car without luxury pricing is very appealing. I know my cousin buys top of the line Camry over the same ES350 only because she is extremely tight. For her there is not enough difference to justify the premium.

Whether folks buy the Veracruz for its luxury will be determined by the buyers. It is a lot of CUV for the buck.

joe97 · July 2007

Luxury Brand Name
Dealer Network
Strategy and Logistics (umbrella for many sub-items)
And most importantly:

Product Portfolio

I think the Veracruz should shift over, the RWD sedan and coupe obviously, with another sporty coupe slotting in the current spot of Tiburon. Also, the production of Portico concept and the more luxurious version of the RWD sedan (LWB).

I wouldn't mind seeing the brand name called Genesis

andre1969 · July 2007

how ready Hyundai is to enter the luxury market, but I have to admit that the Azera's pretty nice. Heck, even in its cheapest form, with the velour interior, it looks like they definitely put some effort into it.

mpuzach · July 2007

...Hyundai could very well become a force to be reckoned with in the luxury market. Though I don't think there's been any info released on the interior yet, what we do know includes:

V8 power with "well over 300 hp".
Rear wheel drive.
0 - 60 in "well under 6 seconds".
Exterior styling with more than a hint of the current BMW 7-series.
As proven by the current Santa Fe, Azera, and Veracruz, a company with plenty of determination to out-class the class leaders.

As a life-long "car guy" (actually, I'm probably more of a "car snob"), until very recently you'd have had a better chance of seeing me fly to the moon than owning a Hyundai. That changed after my first test drive of a 2007 Santa Fe. I'm now the proud owner of a 2007 Santa Fe Limited AWD. It's an outstanding SUV and I couldn't be happier with it. If Hyundai produces the luxury Genesis (which seems to be a virtually sure thing), I'll be first in line to check it out. In fact, I'll go so far as to say that I'll take a close look at it not even though it's a Hyundai but because it's a Hyundai.

gagrice · July 2007

Do you think that Hyundai can ramp up production fast enough to supply another network of dealers? If they cannot build enough Sonata 4 cylinders and are selling out on Veracruz it looks to me like they need more production facilities.

iluvmysephia1 · July 2007

that Lexus is merely smoke and mirrors and Mercedes is ultra-snobbery at its best...that Hyundai and their new rear-wheel drive Genesis sedan, Veracruz diesel variants and et all, will prevail.

It's hard for me to look past the great value Kia and Hyundai bring to the marketplace, and I'm not really a large car or luxury car fanatic...but the new Genesis RWD smacks of reality for mass conversions. No, beyond just handing out flowers at the airports...this will continue to attract the masses to the Hyundai brand. DrFill...you have been a source of extreme entertainment the past several months. Your loyalty is kind of...ummm...scary. No, I don't want any Toyota flowers, fill-ster.

lemko · July 2007

...did go into the luxury class, they need to come up with another marque like Toyota did with Lexus. I doubt many people would motor up to the front door of the country club in a plush new Hyundai.

I like the Kia Amanti just because it is so bizzare! Who else would build a Buick LeSabre with a Mercedes E-Class front end with a Chrysler grille? Trouble is, seeing the cheap-looking KIA oval on the steering wheel kind of reminds you you're in a poseur luxury car. It's kind of like walking out of a store with a new Armani suit only to look back and see Wal~Mart on the building and closely looking at the suit's label to see it's a "Freddie Armani."

gagrice · July 2007

US Americans are status conscious for sure. I think adding a luxury line may be counterproductive for Hyundai. The cost of the added dealer network will only raise the price and not the quality of the vehicles. Maybe in 10 years when they have a dealer network that is able to handle two lines. Right now Hyundai is in stores with other brands. My local Hyundai dealer is also the VW dealer which is an add-on to a very large Ford dealer.

I think giving people more for their money and that great warranty without the added $2000 at closing is a big plus.

Hyundai needs to add more production in the USA, expand current dealer network & maintain good QC. Customer satisfaction is riding high for Hyundai. They need to keep that momentum going and do not worry about appealing to the Country Club crowd. They are a very small part of the buying public. I think the Veracruz will appeal to the very large soccer mom population that cannot afford the over priced nameplates.

bumpy · July 2007

Right now Hyundai is in stores with other brands.

The Hyundai dealerships I've seen are stand-alone facilities, though I don't doubt there are some multi-brand sites still around.

gagrice · July 2007

It looks like I have 7 Hyundai dealers within 30 miles of my home. Five stand alone and two combo dealers. That should be enough. There are only 6 Honda dealers and 7 Nissan dealers in the same area.

joe97 · July 2007

Do you think that Hyundai can ramp up production fast enough to supply another network of dealers?

Great question. Exactly why I think Hyundai has to do everything right (almost perfect) coming out of the gate (or don't do anything). In other words, they have to almost predict the number of orders (buyers) and the lead time. Preparation is the key.

Now regarding the question whether a luxury brand should be established? Hyundai has two routes to take (obviously), continue within its Hyundai brand, and divert outward to a new brand

For luxury brand:

Status conscious symbol
Past history and brand perception

For Hyundai brand:

Brand recognition, since the luxury will be starting out zero (good or bad). It will be up to Hyundai to build up like the Japanese three did. It won't be easy but it can be done.

fintail · July 2007

VW tried luxury an fell flat on their face - and their entrant was not a horrible car, just wearing the wrong badge.

If a lux buyer won't seriously consider a German made luxobarge wearing a "VW" in a circle", why will he consider a Korean made unit wearing a swoopy "H" in an oval? That emblem will damn it, no matter how good the car is, itself.

Hyundai is 50 years off having legitimate lux chances. They might be able to get up into Lexus ES land, but not into REAL lux land.

gagrice · July 2007

I don't see them trying to venture into the "S" or "LS" market, as VW tried to do. They are going after the money making "ES" and "RX", both re-badged Toyotas. Even the "E" class Mercedes would be a stretch. The difference these days in content is not what it was 20 years ago. I think one of the biggest selling points is the warranty. Buying a car today no matter what the brand, you need a warranty way into the future. Unless you dump it in 3-5 years. It used to cost $800 for a transmission rebuild. Today a Honda transmission is 5 grand.

joe97 · July 2007

The problem VW faced was the company tried to sell a $60K+ (base price) car, an amazing car nonetheless - the Hyundai entry will start less than 30K. Based on current demographic of the Azera & Veracruz, I don't think it will be a stretch to say Hyundai will enjoy the same success the Azera and the Veracruz have had so far.

Mr_Shiftright · July 2007

I don't see any luxury SUV with a diesel engine. That's simply not going to work in the $60,000 class. A diesel is a work engine, not a luxury engine IMO. The two concepts defeat each other. People spending money on luxury don't want to economize (the whole idea is to SPLURGE) and they certainly don't want association with Ford pickups or VW GTIs.

I also don't see the Hyundai name on a luxury vehicle. As someone mentioned, VW found out that doesn't work. Perhaps Hyundai could carry into the $40,000 range, maybe run with Acura, but that's about it.

The point really isn't whether Hyundai could BUILD a very competitive luxury car or SUV, the point is whether their brand image would support it. So my opinion is yes to the first--they could build a credible luxury car/SUV and no, they Hyundai name cannot support a price tag over $40,000 -- $45,000 more or less.

There are no Honda luxury cars, no Toyota luxury cars, no Chevrolet luxury cars....so Hyundai needs a new name.

gagrice · July 2007

I believe if you check into the Mercedes E320 CDI, ML320 CDI and GL320 CDI they are VERY popular and not discounted as much as the other non diesel models. All in the $50k to $70k range. I really don't like the looks of the ML or GL but may be persuaded by the diesel engine. I don't think I am alone in this.

PS
I want luxury, economy and to do my part to save on fossil fuel. Diesel is the only option. I am looking for 30 MPG on the highway in a luxury SUV with alternate fuel. Got any other ideas.

docrw · July 2007

Are you serious, diesel is only for work engines? Mercedes has a fantastic turbo diesel in the E320, ML320 and soon to be GL320. It is smooth and refined and delivers a ton of torque. Soon Audi will also be putting a diesel into the Q7 and some sedans. Diesel engines are not just for big trucks anymore and with the Bluetec standards with lower emissions and clean diesel fuel there is relatively little downside and tremendous upside with fuel economy and no real loss in power. So go tell the people spending 50-60K on a Mercedes E320 that they are missing the point in spending that much money.

fintail · July 2007

I can agree with Hyundai meeting with acceptable success in that part of the market. I would believe it.

Maybe the "luxury" term is being overused here. These are cars that are midrange, with a little poshness. Real luxury in a new car today does not start at 30K.

bumpy · July 2007

Maybe we should call it "near luxury"? The big difference between the Phaeton and whatever Hyundai calls the BH is that there was a huge leap from a Passat to a Phaeton, while the V6 BH will sit just above the Azera, and the V8 BH will sit just above that (and the VI will presumably sit just above that).

mpuzach · July 2007

1. Would the market support a Hyundai-badged luxury vehicle?

2. Would the market support a new luxury brand positioned under the Hyundai umbrella (ala Acura, Infiniti, Lexus)?

IMO there's little if any doubt that a luxury (or "near-luxury") car such as the upcoming Genesis will be successful. I'm betting that demand will be such that it will be tough to get one for the first year of production, especially the V8 version.

As for the addition of another brand, it would be a huge undertaking that would cost boatloads of $$$. To do it properly would require a new dealer network and an unsurpassed level of execution at all levels. With the enormous investment that would be required, I don't see it happening.

jcwsbltd · July 2007

Well, if you consider what used to constitute a Luxury car, you'd be right - but if you consider what features are available today, it's questionable.The difference between $30 grand and $40 grand isn't so great anymore. $50 grand used to be the price of a smmall house - now you would have to have cars priced at $200,000 equivalent.

Datsun changed to Nissan for a better perception. Toyota did well with lexus out of the gate. Infiniti didn't do so well until they got rid of the boring designs and got serious about competing.

Back to the original question - what constitutes Luxury? If it is higher levels of construction, engineering, safety, comfort, convenience features and toys, then all todays modern cars could compete. But they wouldn't have the Cachet or Image that Merecdes, Jaguar, BMW , Volvo, Saab, Cadillac, Lincoln used to have. These brands are no longer so far out in front of the pack.(Jaguar and Saab have already gone the way of the Dodo, Cadillac kinda successfully revamped it's image). They were the brands considered the most expensive, sexiest, quietest, safest, most reliable and well built up to 100K miles - not any more.

I remember seeing my first BMW in the early 70's and they looked horrible - weird rounded corner little things, with sparse interiors - "you paid how much for that?". They evolved into the cars they are today, just as Hyundai is evolving.

If Hyundai was to re-brand and create a new image, then IMHO they have already shown they can compete with quality of build and design. If they continue to consistently win awards, then they will almost surely want to upgrade their vehicles- It's the way of Marketing spin and getting to the top of the food chain that counts in the financial world. As it stands now, They have more to gain while the others have more to lose. In any event, it ain't gonna happen soon - maybe 5 years?

jaymagic · July 2007

Just did a Hyundai survey on a name for the "Genesis" model. My first choice was Geneva (Genesis was NOT an option). Others were Epsilon, Talus, Isis, and Zeta.

As a VERY happy Azera owner, yes I would more than consider a Genesis in a couple of years.

gagrice · July 2007

I just went a sat in the Veracruz Limited. It has better rear leg room than the Grand Cherokee Limited & Acura MDX. The interior looked as good as the Acura MDX. It was not up to the ML350 or the GL450 level. It looks as good as the RX350. I have not sat in the new RX so do not want to comment on the comfort of the seats or interior. Both the ML & GL are much more plush, as you would expect for the premium.

The Veracruz Limited with the Ultimate package had a window sticker price of $36k. It suffers from the same thing I found in the new MDX and Caddy SRX, rather hard uncomfortable seats. The 3rd row was roomier than most 7 passenger SUVs. Still just for kids.

Just as a side note. The salesman at the VW/Hyundai dealership, told me he sells 3 Hyundais to every VW. The lot was filled with VWs of every model. One row of Hyundais. They just got this Veracruz Limited prepped this morning. I could live with it if it was a diesel. I am still leaning toward the ML or GL diesel. I took the Grand Cherokee Limited with diesel off my list after trying to get comfortable in the back seat. Unless the driver is a real short person you have very little leg room in the back seat.

carbuyer11 · July 2007

Once again, this post proves a point I made a while back- Hyundai is getting the attention of more affluent prospective buyers. Acura? Mercedes? Hyundai must be doing something right.

gagrice · July 2007

My impression of Hyundai a couple years ago was the loaner we got that was scary to drive in freeway traffic. And I drove around Phoenix in my sister's Tiburon. Neither one was anything I would own. The Azera and Veracruz are very nice and priced right. They are progressing very well.

Mr_Shiftright · July 2007

Yep, diesels are work engines. Most Mercedes diesels in Europe are mostly commercial cars in livery...taxis, limos, etc.

We get a smattering of highly optioned Mercedes diesels to buy in this country...a very small market for Mercedes here. This is because of American's dislike for diesel cars in general but also because diesel fuel is not priced advantageously here as it is in *most* of Europe.

The diesel engine does not define luxury in Mercedes, or even support it I dont' think. It's just a practical solution to a market situation in Europe that we don't have here. Mercedes use of diesel goes back to the 1930s.

Now if Lexus, Jaguar and Cadillac all came out with diesel cars in America (that'll be the day), then I might change my mind about Hyundai doing the same.

As for VW, their reputation doesn't help the diesel cause at all. And Benz has been staggering around in the reliability department as well. If this keeps up, Americans may come to associate the diesel engine with problems not pleasure.

I wouldn't go there if I was Hyundai. I'd keep diesels in cheap cars and compete with VW and kick their butts. And maybe a turbo diesel SUV in the mid-range, say $35K. But not into the luxury range.

joe97 · July 2007

For the record, I am a big supporter of diesel engines. One trip to Europe changed my perception, and then a few more trips...

Americans associate diesels with loud and dirty engines, and most of those are in the past. More and more automakers are expected to release diesel variants of their cars, SUVs, and trucks, including Hyundai, by the end of the decade, despite tough emission laws. I recall Hyundai officials stating their diesels would be an $1,000 option (not sure which model it would apply), and if that's the case, the diesel option not only would work out the price difference upfront in a very short period of time, it would also provide savings much much faster than any current hybrid on the market.

In short, I am all for diesel, from cars at the luxury level to the mainstream level.

gagrice · July 2007

I think that all the auto makers including Toyota were surprised that people would pay a $3k-$5k premium in the USA for the hybrids. This gave renewed energy to overcome the emissions regulations that have kept diesels out of our market. A diesel in a comparable vehicle will get better mileage than a hybrid. The big question in my mind will the regulators neuter diesels with excessive emissions devices.

That said after sitting in the Veracruz yesterday I would put it on my list if they were to come up with a diesel version. I will NEVER buy a new gas vehicle again. That 2005 GMC hybrid is the last gasp for gas power in my garage.

mjb56 · July 2007

Excellent point. The warranty is the key. My dealer threw in a 200K mi. warranty if you had your service done there. Given how complex the modern car is, a decent warranty is essential. This is where Hyundai exceeds everyone. And its a great vehicle.

gagrice · July 2007

Two things have caught my attention with Hyundai. I have a close friend with a 4 year old Sonata. It has 140K trouble free miles. He opted for the 100k mile bumper to bumper warranty. Never needed it. The car looks like new including the dark red color. It has never been garaged in So. CA sunshine. That is a testimony to the paint that Hyundai uses.

Second, is the Azera and Veracruz. I am not a fan of any of the econoboxes sold in America. So seeing that Hyundai has kicked it up a notch caught my attention. While at the dealer yesterday I checked out the new Elantra and Sonata. They both look very good. I would recommend anyone in the market for mid sized or larger car to check out your Hyundai dealer. Even if you end up with a HonToy you will have a better idea of what you should get for your hard earned dollars.

gagrice · July 2007

I just do not see the need for another nameplate that is Luxury only. Here is a satisfied customer that cross shopped the luxury brands with Hyundai.

To anyone still deciding about buying the Veracruz, let me say that it is a fantastic car. I have been a loyal Toyota/Honda buyer for 20 years and also was skeptical about Hyundai quality. I have found that Hyundai is not the Hyundai of the past. They have one of the best line ups of vehicles out there. I have been shopping for over a year and have seen and test driven everything, incl. Pilot, CR-V, RAV4, CX-7, CX-9, MDX, RDX. I've owned a Highlander for 5 years. The Veracruz blows them all away. Styling, capacity, handling, comfort, warranty, value, all better than the competition. Oh, and the owners manual and maint. schedule handbooks are among the best written I've ever read. I've said enough! Time for a little "Veracruzing"!

sandy19, "Hyundai Veracruz: Prices Paid & Buying Experience" #123, 26 Jun 2007 6:15 am

iluvmysephia1 · July 2007

and it is more proof that Hyundai is here rock-solid. I think that Hyundai should just put out the Genesis RWD car and keep it under the Hyundai badge. Keep the price competitive and keep the Long-Haul Warranty.

Hyundia/Kia execs made an announcement around 2002-2003 stating that the Long-Haul would be here through 2008, at least. I betcha they extend it past 2008. Like an above poster said a great Warranty is a must these days. Hyundai/Kia's move to offer this Warranty has gained them who-knows-how-many-mega-sales. Finbarr O'Neill was spot on to offer a similar year and mileage Warranty when he got to Mitsubishi.

gagrice-interesting point about Hyundai paint. I was more than impressed with both of my Kia's paint jobs and their ability to hold up long-term. I have read of some doubt about Kia Spectra paint jobs from 2002-2004 models, IIRC. Read about them here on Edmunds if you want. Some chipping and flaking evidently. Who knows, with the strikes they have over there and that some-of-the-time worker discontent, it could be an inside job of some sort.

I am impressed with the 2007 Hyundai Elantra as well. A supermarket across the street from the hospital here in Willcox must employ someone with a new Elantra 'cause I see it there all the time. Sort of a Violet Mist type color that Kia painted on to my '99 Sephia. This new Elantra looks better in person than on the internet. It has some interesting curves built in. For the price and that Warranty it can't be matched by Toyota and Honda. Mitsubishi's Lancer does top it, but that's another story for another day. Eh? :shades:

tenpin288 · July 2007

FYI, Hyundai has announced that the Long Haul warranty has been extended through 2010.

Warranty extended

iluvmysephia1 · July 2007

as for the Long Haul Warranty being extended through 2010...

Coolio! Topped off with an Iglasius! :shades:

jchan2 · July 2007

There is room for Hyundai, but they cannot stumble along for ten years or so like Infiniti did. They need to nail everything right out of the gate- warranty, quality, driving experience, dealership experience, features, horsepower, the quality of soft drinks served in the waiting areas, EVERYTHING. If Hyundai makes one mistake with this large investment, the competition will eat them alive.

Genesis seems like a very good name to me, but I could live with almost any name.

As for the Veracruz, I was extremely impressed with it, especially given that a fully loaded one stickered at $36K MSRP. The only thing it lacks is a factory Navigation system with XM NavTraffic, but I can live without it.

I was extremely impressed with the Santa Fe also. Fuel economy seems to be the car's only downfall, but the price for a base Santa Fe is very attractive.

For Genesis, I could see the Azera and Veracruz moving over, but both need a little tweaking in feature content before they could move over. Both would need to drop the base cloth models and add some tech features. (Navigation with Real Time Traffic, Bluetooth, DVD Entertainment in the Azera, heated and cooled seats, heated rear seats, etc.)

The quality in recent Hyundai products is also very impressive. I really don't see a point in buying an Aveo when I could get an Accent for about the same price (or even less) and have it be a better car. (IMO)

iluvmysephia1 · July 2007

don't forget about the Kia Rio. The Kia Rio5 made it to the final 28 cars in the Motor Trend 'Best Cars' 2006 list. It is a good little car in sedan or hatch Rio5 version. Not to forget the Long Haul Warranty and about 32mpg city and 35mpg highway. Same for the Accent, yes.

jchan2 · July 2007

Aren't the Rio and Accent essentially the same car underneath?

iluvmysephia1 · July 2007

I have always read that they are essentially built on the same chassis. Between Kia's Rio and Hyundai's Accent you literally are just picking the bodystyle you like more.

Having said that Hyundai doesn't offer a competitor to the Kia Rio5, they offer an Accent hatch but it differs in build from the Rio5...as I understand it the Rio5 is stiffened in the chassis and comes with larger tires and a more "tossable" suspension for more fun in the twisties. I took a long look at one when still living in Idaho but hung on to my '01 Sportage 4X4. I wouldn't rule a Rio5 out for possible purchase one day, though. It was nice to see the lack of prejudice from Motor Trend, though, with their Top 28 cars comparo/review for 2006. Truly heartwarming to see. Kia and Hyundai have gone beyond just "coming a long way."

Mr_Shiftright · July 2007

But those cars aren't luxury level. I think Hyundai can compete okay with the cars you mentioned, but not with Lexus, MB, BMW, Audi, etc on the top end, was the point. Can you sell anything for $70,000 with a Hyundai name on it?

gagrice · July 2007

I don't think of the ES350 as a luxury car either. It is luxury in name only. More reason for Hyundai to offer a high level of sophistication in cars like the Azera and Veracruz without adding a luxury nameplate.

joe97 · July 2007

As far as hatches go, here is the order:

Accent SE > Rio5 > Accent GS

B&M Racing sport shifter will be available as standard equipment on the 2008 SE, previously available as dealer add-on:

http://www.hyundainews.com/Media_Kits/2008_Models/Accent/Press_Release.asp

urnews · July 2007

The Hyundai dealerships I've seen are stand-alone facilities, though I don't doubt there are some multi-brand sites still around.

Bumpy,

The Hyundai dealer in our small city, population 30,000, is also the Mazda, Honda, Mercedes-Benz, Toyota, Nissan dealer while the Kia dealer also sells Dodge, Chrysler, Jeep, Ford, Lincoln, Mercury.

A majority of the Hyundias and Kias on the road in these parts are the low-end, entry-level products. I doubt if a "luxury" Hyundai would fair very well in our area.

fezo · July 2007

Yeah, we have a Hyundai, Pontiac, Buick, GMC Subaru dealer over here. Up the road is a Nissan-Kia-Cadillac dealer.

I have trouble with the concept of a Hyundai luxury car but it wasn't that long ago I had trouble with the concept of Hyundai producing a vehicle that I'd go check out if I were in the market. They've got several now.

gagrice · July 2007

The Hyundai dealer in our small city, population 30,000, is also the Mazda, Honda, Mercedes-Benz, Toyota, Nissan dealer

It would be very interesting to find out which cars sell the best under that one umbrella?

Is There Room in the Luxury Market for Hyundai?

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