Is There Room in the Luxury Market for Hyundai?

toye · February 2010

Toyota has been busting their own chops lately

fintail · February 2010

Indeed, and H will capitalize on it greatly.

bobad · February 2010

Indeed, and H will capitalize on it greatly.

That's nothing. It's very minor compared to Toyota's other weaknesses that Hyundai is capitalizing on.

backy · February 2010

A Hyundai is tops in ALG's residual values for mid-sized segment:

http://www.prnewswire.com/news-releases/2011-hyundai-sonata-gls-tops-popular-com- petitors-including-premium-brands-in-alg-residual-value-index-83845712.html

They also noted (more on topic also):

Hyundai's world-class quality has significantly improved the brand's residual values over the past few years. Hyundai's premium models are driving the improvement according to data released in ALG's January/February edition. The 2010 Genesis sedan achieves 47.5 percent retention of MSRP, the all-new Genesis Coupe achieves an outstanding 52.3 percent and the 2010 Veracruz retains 49 percent of its value over a 36-month period.

toye · February 2010

Sorry Backy even armed with more proof about Hyundai success you'll still find those people who still think the earth is flat!!!!

kingsalmon · February 2010

Silly Toye...

Everyone knows the earth is flat and the sun revolves around the earth! Actually the earth is the center of the universe! Hyundai will never be equated with luxury! Anything Japanese is luxury and Toyota will always be better than stupid copycat Hyundai!

All kidding aside, I really liked the Hyundai commercial with the "luxury for common folk" like us! I'd rather have the luxury features on a Hyundai than having to pay an arm and a leg for some BS Infiniti/Acura/Lexus nameplate. Inside, it's still a Nissan/Honda/Toyota product.

Did any of you check out Kia's new Optima? Looks really good!
http://www.burlappcars.com/2010/02/2012-kia-optima.html

acdii · February 2010

The cost? If two cars have heated leather seats, but one costs more, is that the Luxury one? Lets compare two vehicles that are extremely close to each other, an RX350 and a Veracruz. Does being $10,000 more make it Luxury, even though they are both similarly equipped? They both have very smooth quiet rides, they both have Heated Leather seating, they both have rain sensing wipers, they both have automatic climate control with auto sensing exhaust blocking(whatever they call it, it closes a damper to recirculate when it detects exhaust fumes), they both have a great sounding stereos, oh wait, the Veracruz does, the Lexus I test drove did not, the Lexus does not have a 3rd row seat. As far as power is concerned, the Lexus MUST use 90+ octane, the VC does not, but if it does use 90+ it has the same HP ratings as the Lexus. A little known fact, the Hyundai can detect the Octane rating of the fuel and adjust the engine timing and fuel flow accordingly as if you added a tune to it. I didn't believe it until I tried it, and after a tank you can feel a difference in performance(probably why my tires aren't biting the snow like they did last year

).

So is the Lexus a luxury because it cost $10K more? If so that L badge needs to be relocated, preferably to a forehead.

I test drove an RX400h, the interior was nice, the only thing I saw though that was just a bit better was the thickness of the plastic in the doors, the leather seats made me sweat. The ride was smooth and quiet, but when I stepped on the throttle all I heard was a loud engine that sounded like it wanted to leave the vehicle. If the sunroof was open, or a window was open, forget about trying to listen to the radio, no matter how much you try to turn it up, you just could not hear it. It did not have XM, did not play MP3 disks, and did not have an AUX input for an MP3 player. The display for the hybrid and NAV was identical to a $20k Prius. This was a used one, and I just could not see myself paying $27K for it, MAYBE $19K, but surely not what the going rate is for it.

FWIW Hyundai stepped up to the plate and hit a home run with the Veracruz, and if they keep at it, they can do the same with the sedan against the ES lineup( you know the Camry with an L on its hood).

bobad · February 2010

You should write with more passion and bias. Logic and objectivity will get you nowhere.

smarty666 · February 2010

oh no, another anti-Japanese car hater who dramatizes and blows any problem with a Japanese car way out of proportion! no bias there of course!

acdii · February 2010

Oh no bias from someone who OWNED and DROVE a Prius AND a Camry Hybrid for 3 years and 58,000 miles. :P

Believe me the quality on both cars was sub par, I can see it on the Prius since it used recycled material, and to keep the cost down, but the Camry I fully expected better quality for a car rated so highly. You want bias? Talk to a Toyota owner who would never even think about looking, let alone test driving a Fusion.

And an ES300 is a Camry with a different letter on its hood! :lemon:

But if you want to spend $46,000 on a car that is really no better than another car that is $10,000 less, go right ahead, I will stay on the smart side and drive the $36,000 one and be even happier since I don't need to put high octane in it! :shades:

smarty666 · February 2010

Have you ever even driven a Camry XLE and a ES350 back to back? I have and there was a world of difference between the two vehicles in regards to quality, refinement, ride, etc; most people who say what you do about the Camry/ES350 thing just are disappointed with Toyota for some reason and want to trash on them as much as possible or because they can't afford a luxury car

!

your numbers are also way off base because you again over dramatize the numbers by loading the vehicle up; a Camry XLE V6 can be around 30k while a semi loaded ES350 is about 36-37k, not this 10-15k price difference your quoting; it can get that high if you load the cars up with nav and every tech feature in the word but most people, like myself don't door need that

!

your also paying for the much better customer service, loaner cars, and dealer experience with the luxury cars then the regular division cars and trust me, after having luxury and non-luxury Japanese cars there is most certainly a difference in customer service and dealership experience between the luxury and non-luxury divisions!

but as you pointed out, some people don't need a luxury car or want to spend the extra money for the higher quality material and service and that is fine, but don't sit there and they trash talk the luxury cars that they are overpriced and not worth it; you can get some luxury cars for really good prices without breaking the bank if you load them up correctly!

tjc78 · February 2010

I will stay on the smart side and drive the $36,000 one and be even happier since I don't need to put high octane in it!

Do you realize that the Camry V6 and the ES350 use the exact same powertrain? The only reason the Lexus shows premium fuel as a requirement is that the HP is rated at 272HP. The Camry is rated at 268HP using regular. The computer adjusts for the octane used. I had an Avalon with the 2GR V6 (same as Camry/ES) and the manual specifically stated regualar was ok but for "enhanced performance" premium could be used.

I would assume that Lexus figures people shopping the price segment of the ES won't mind spending a little extra for that "enhanced performance" thus publishes the higher HP # along with the premium fuel requirement.

iluvmysephia1 · February 2010

sedan. Ladies and gentlemen, take a look at the 2012 Kia Optima.

Since I left the daily Kia driving experience the boys from SK have only gotten better. The acquisition of Mr.Peter Schreyer as their new Design Chief (from Audi Motors) was a big and important one.

Beautiful car.

backy · February 2010

A great looking car (albeit an artist's conception, not a real photo, yes?), but... a luxury car??

Don't get too enamored by artist's conceptions... reality is usually different.

iluvmysephia1 · February 2010

backy, I only clicked on the link in a post above in this very thread to see this new Optima design. But, you're right, it's a midsize sedan, and although it may be construed as looking luxurious, it's more an exciting looking sedan from Kia.

More sporty and beautiful looking than luxurious. Kia would really have to pour on the interior amenities to have it even be remotely thought of as luxurious. And the luxurious crowd seems to be a pretty discriminating bunch.

Yeah, this new Kia Optima is not gonna fall in to the luxo category in any shape and form. But did they ever do a good job with it!

millwood0 · February 2010

doesn't that look very chevy-ish? like a cross between volt and malibu.

ergsum · February 2010

http://www.topspeed.com/cars/hyundai/2011-hyundai-azera-ar84829.html

fintail · February 2010

That's a pretty rough drawing of a car. Hard to guess what the finished product will look like, based on that. But the current Optima is so painfully beige, it probably will be an improvement.

I too see the Chevy face, reminds me of a Camaro sedan.

Hyundai and Kia both are well served by hiring some outside design talent...as the designs so far haven't exactly been classic.

Audi doesn't feel a need to add "Motors" to their name, they know they won't be confused for a toaster or bicycle manufacturer :P

bobad · February 2010

@ergsum,

What do you think of the new Azera's styling? Looks pretty conservative to me. Pictures can be misleading, so I will reserve judgment until I see one on the lot.

Found a driver review (not professional) on another forum for the 2011 Sonata.

Sounds like the new Sonata is better than ever, with improvements in every area. More power in the i4, quieter, better handling, quieter cabin (already very quiet!), very comfortable seating, better quality interior materials, attractive dash, many convenience items.

houdini1 · February 2010

Yeah, that grill sure looks like the chevy bow tie to me. Also reminds me of the Camaro from the front. Hopefully they will clean it up.

backy · February 2010

Unlikely they'll "clean it up". It's the standard Kia grille style and has been for some time, going back to the 2009 Optima in 2008. There's a similar grille on all the new Kias except the funky Soul: Forte, Optima, and Sorrento.

captain2 · February 2010

Have you ever even driven a Camry XLE and a ES350 back to back? I have and there was a world of difference between the two vehicles in regards to quality, refinement, ride, etc;
EXACTLY - there are a lot of folks that think the high end Camry and the ES are nothing more than rebadges done at the Toyota plants in Ky. Not the case. The ES as other Lexus branded products are actually assembled in Japan and do use parts (engine, tranny etc.) that are exported to Japan from here. The other differences in the ES's' fit/finish and interior qualities is largely because it is a Lexus and not a Toyota - a justification (for some) for the $15k premium- along with a demonstration that the Lexus 'badge' does indeed have some value . It's not like you are getting screwed buying an ES - the Camry XLE and the ES are hardly the same car - as you say.

houdini1 · February 2010

Is that the standard bow tie windshield also?

backy · February 2010

I don't know. Can you tell me what a "bow tie windshield" looks like?

houdini1 · February 2010

I know, I have never seen anything like it before either. I am referring to those weird little cut outs on the upper corners of the windshield. Supposedly to harmonize with the bow tie grill. Does that help?

backy · February 2010

Well, I wouldn't call it a "bow tie". But I think it looks kinda cool. I just wonder: 1) how much that glass would cost to replace, and 2) if that design will survive to the real car. I'll bet the answer is "no" on #2.

captain2 · February 2010

the Veracruz may be every bit as luxurious and otherwise comparable to an RX, BUT price notwithstanding the Veracruz will never be a luxury anything simply because it is a Hyundai. While I personally regard the lower end Lexus' (RX and ES) products as entry level, Lexus is nonetheless a luxury brand.
A slightly upgraded Veracruz rebranded as a 'Genesis' sold for a few more $ and sold only where other Genesis' are sold, could easily find a place amongst 'luxury' vehicles, it is that good.

smarty666 · February 2010

What really is a pain with cars like the Genesis, Maxima, and Avalon is, when you load them up, even a little bit they really encroach into luxury division prices despite the fact your still dealing with mediocre Hyundai, Nissan, and Toyota customer service and dealership experience, which obviously improves when you move up to a luxury division!

the question is, it worth it to pay the money or spend the same if not a few thousand more to move up to the luxury divisions, namely Infiniti and Lexus; I forget Hyundai doesn't have a luxury division! that really is what makes the Genesis an oddity!

tjc78 · February 2010

I forget Hyundai doesn't have a luxury division! that really is what makes the Genesis an oddity!

Why is the Genesis any different than the Maxima and Avalon?

toye · February 2010

RWD is the main reason

smarty666 · February 2010

I'm sorry for the way that came out and I should have been more specific; the reason why the Genesis is an oddity, is not only RWD but Hyundai does not have a luxury division like the Maxima and Avalon do; the Maxima has Infiniti and the Avalon has Lexus

you have the option if you don't want to stay with Nissan and the Maxima of going up into the G37 in Infiniti and if you don't want to stay with Toyota and the Avalon you have the option of going into a ES350 in Lexus; if you don't want to stay with Hyundai and the Genesis you have no choice; Hyundai has no luxury division comparable to Infiniti or Lexus - that was the point I was trying to make!

if Hyundai is truly going to make it as a serious competitor against Toyota, Honda, Nissan, VW, GM and Ford I think at some point in the next 10 years they are going to have to establish some sort of luxury division because all of their major competitors have one, Honda-Acura, Nissan-Infiniti, Toyota-Lexus, GM-Cadillac, Ford-Lincoln, VW-Audi, and Hyundai-???

what do you guys think? will Hyundai have to do this to stay competitive?

backy · February 2010

V8 the other.

toye · February 2010

Also remember the Equus is coming this summer or fall

backy · February 2010

But the G37 and ES350 are not good comps to the Genesis. Better comps are the M and GS. And they are much more pricey than the Genesis. You do pay for that luxury brand label, and what comes with it.

I think Hyundai will start a luxury division eventually, once they have more than one vehicle to put into it. The Genesis has given Hyundai credibility in the high-end market. I think that was needed before they started up a luxury division. As I've stated earlier here, the next-gen Veracruz, the Genesis sedan, and the Equus might be enough critical mass to start a luxury division. Hyundai also has a fancy smaller crossover SUV they have put out as a showcar that could be added, and maybe they could create a luxo version of the Genesis coupe.

toye · February 2010

Hyundai will do it on their own schedule and not what anybody else thinks when it should happen, I'm sure they are studying the Toyota mess and will be double sure it nip things in the butt if a quality or safety issue arises.

smarty666 · February 2010

the V6 versions are good to compare to the ES350 and G37 Sedan because they are very close in price and have similar equipments

I do agree that the V8 Genesis is harder to compare because the ES and G37 have no V8 options and then if you go up to the M and GS your talking a huge price increase over the V8 Genesis

bobad · February 2010

I do agree that the V8 Genesis is harder to compare because the ES and G37 have no V8 options and then if you go up to the M and GS your talking a huge price increase over the V8 Genesis

Sounds like a great dilemma to have! I'll take mine in blue.

backy · February 2010

Why is it always price? Hyundai offers more value for the dollar. I am really surprised folks haven't figured that out yet.

The ES350 is FWD and much smaller insider than the Genesis. The G37 is considerably smaller than the Genesis. Neither offers a V8. The M and GS are RWD, both offer a V6 and V8, and are closer in size to the Genesis.

toye · February 2010

To some people LUXURY=ONLY BIG $$$!!!! :shades:

People are now believing that you can have true luxury without spending 50K!!

I went to a local Hyundai dealership the other day to see the new 2011 Sonata, (another huge bulls eye)and the front of the dealership had late model of 3 MB, 3 BMW and 2 LEXUS. That my doubters says it all!!!!!

bobad · February 2010

I went to a local Hyundai dealership the other day to see the new 2011 Sonata, (another huge bulls eye...

I'm reading about people driving the 2011 Sonata out of curiosity, and ending up owning one. That seems to be common in the Genesis, Veracruz, Santa Fe, and Sonata. That's why I stay away from the dealer.

acdii · February 2010

Well, I can sell you my 2008 VC Limited if you really would like a NICE car! Only one reason I am even considering, it is FWD, and the last snow we had convinced me AWD is needed. It drove OK in the snow, but where I live, out in the country, they don't plow the roads very well, and a few times I came to a point where I nearly ditched it. It would be a shame to damage something as nice as this because I didn't think I would need AWD where I live. :sick:

If Hyundai had 1.9% for 60, I would be there tomorrow to get an AWD version of the Veracruz.

fintail · February 2010

Yeah, dealers never buy used cars at auction :shades:

My local Ford and Dodge dealers always have a few MB and BMW <5 years old too...that says it all! :P

The new Sonata is being sold now?

toye · February 2010

The cars I saw were much newer than 5 years old.. 2-3 year old at worst. You're right anybody can take an old model but of course they send them right to auction.
You're still in denial about Hyundai's sucess!

tjc78 · February 2010

if you don't want to stay with Hyundai and the Genesis you have no choice; Hyundai has no luxury division comparable to Infiniti or Lexus - that was the point I was trying to make!

I understand your point, however my point was that I feel that the Genesis is in the same leauge as a Maxima or Avalon (300, Taurus too). As for the V8/RWD argument the Chrysler 300 is RWD and can be had with a V8 does that make it a luxury car?

I think at some point in the next 10 years they are going to have to establish some sort of luxury division

Why? It costs millions upon millions to open another division. I think part of the reason Hyundai is being so innovative and profitable is because its operating costs are lower than the other companies. Add in a lux division and they better hope its the next 1990 Lexus otherwise its going to be a loss in the end. There is just too much competition.

backy · February 2010

The Crown Vic has RWD and V8 also, but it's not a luxury car. It's not JUST V8 and RWD, but other attributes that make the Genesis beyond the likes of gussied-up FWD family cars like the Avalon and even the Maxima. Maybe you could drive an Avalon and Genesis 4.6 back-to-back to see the difference?

Also consider, a luxury division does not necessarily mean a separate dealer network, which is where much of the cost lies. The money already being used to advertise the Genesis could be folded into the marketing budget for the new division.

tjc78 · February 2010

Maybe you could drive an Avalon and Genesis 4.6 back-to-back to see the difference?

I have.... the Genesis is faster and handles better. Considering I own a Genesis and have owned an Avalon I can you the cars are very, very similiar. My Genesis is a V6 so that is where the bulk of my comparison is. The Genesis does have a nicer interior in terms of materials used. However, Hyundai's 3.8 is absolutely no comparison to Toyota's 2GR V6 and the Avalon rides much better than any Genesis ever could.

As for the Crown Vic/Grand Marquis.... well we all know they are dinosaurs and not luxury cars. However, when Hyundai can make a car that has stood up like the Panther platform let me know. Those beasts are known to go to 500,000 miles

smarty666 · February 2010

Why is it always size and engine? I am really surprised folks haven't figured that out yet! Of course you have to go with price, I got raked over the coals when I got my Maxima because everyone said, oh why did you get that, that's almost as much a G37 Sedan or TL; and the Maxima is constantly compared to the TL, G37, and ES350 because its comparable in price to those luxury vehicles despite the fact their is more interior room in the Maxima then those cars; if I have to be beaten over coals about those inaccurate comparisons because of price then there is no reason why the V6 Genesis cannot be compared to the G37 and ES350 since they are very similar in price

the statement that Hyundai offers more value for the dollar is highly subjective and I respectively disagree with it; when you get an Infiniti or Lexus your getting superior customer service/dealership experience, loaner cars and much higher resale values then a comparable Hyundai

Now don't get me wrong, the Genesis is a nice car but like I have found out with my Maxima, both are not cheap cars and I def am lacking in customer service with my Nissan dealer compared to what I would have gotten if I had went back to Infiniti!

tjc78 · February 2010

then there is no reason why the V6 Genesis cannot be compared to the G37 and ES350 since they are very similar in price

I compared all three actually. I bought the Genesis, because I did feel (and still do) that for the money it did offer a better value. Another big selling point to me was the interior room was much better than either of those. That is a very important thing to me, I want a full size car.

smarty666 · February 2010

I agree with you that the Genesis is in the same league as a Maxima or Avalon but because of its price and equipment options in the V6 it is also comparable to the entry-level luxury sedans offered by Acura, Lexus, and Infiniti!

I see your point on opening a luxury division and like I said I think eventually Hyundai will have to do it but if their model is working for them right now, which is clearly has in the last 10 years then they might be able to wait a long time before opening a luxury division; this thing with Toyota right now will def go along way to helping them make even more profit; I think Ford and Hyundai will benefit from this the most

backy · February 2010

if I have to be beaten over coals about those inaccurate comparisons because of price then there is no reason why the V6 Genesis cannot be compared to the G37 and ES350 since they are very similar in price...

Great. I suppose you also like to directly compare cars like the Mini Cooper, Civic EX-L, Sonata, and Crown Vic, as they are all around the $20k price level.

Is There Room in the Luxury Market for Hyundai?

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