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The Value Proposition of Luxury Brands

2

Comments

  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Edmunds quote is contradictory at best, which I think reflects their own doubts:

    How can something be a luxury car without "flaunting it"? I mean, it's not the same as silk underwear----everyone is *supposed* to see it, as it lives on the street.

    The Equus is a luxury car relative to a Corolla. It isn't a luxury car relative to world-class luxury cars.

    Journalists don't get to decide what is a luxury car, nor to forums hosts. Buyers do, ultimately, along with the public's perception of the buyer and his/her decisions. "Successful" or "fool"?

    So we'll see who pays $60K for a Hyundai and if the "luxury" label really sticks, or is dismissed by public perception.

    I have no idea how it'll spin out.

    The LS400 was an instant luxury car, not in spite of its lower price, but because the Mercedes was so grossly overpriced.

    Here again, the general public didn't vote the Benz OUT of the luxury market, but voted the Lexus IN. The LS400 was an impressive debut and nobody said "$35K for a Toyota??"
  • fintailfintail Member Posts: 57,092
    The Century can compete with Maybach? Where? Among rabid Japanese nationalists? The Maybach is priced pretty much in Rolls territory...does the Toyota compete there too, really?

    Personally, I don't put a lot of stock in mainstream American car reviews, which pretty much are chained to ad revenue and seldom meet a car they don't like. I'll have to see other opinions, especially ones that take into account design and handling.

    Starting at 58K...I can buy a lot of still under warranty German luxobarge for that money.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Hyundai should have started its own luxury nameplate. The Equus is a big big mistake in my humble opinion. Maybe they have this move up their sleeve, I dunno.
  • fintailfintail Member Posts: 57,092
    edited October 2010
    Hyundai UK must have some nice cash reserves...I can't imagine that branding strategy working in the UK or on the continent if it was found unsuitable for NA, where as far as I can tell Hyundai has a better image and market share than in the EU. Europeans never fell for Toyota quite as hard as people in NA.

    Hyundai tried to sell the Grandeur for over 40K Euro, and I read once sales volumes of that car were in the double digits in the UK. Tough road.
  • fintailfintail Member Posts: 57,092
    I get a Phaeton vibe from it...cheaper, but without the design and likely driving competency. I could be wrong...but conspicuous consumption remains as big as ever during this super-recession, it'll be a tough sell.
  • hpmctorquehpmctorque Member Posts: 4,600
    edited October 2010
    In earlier messages we expressed numerous opinions on the relative values of models from Toyota/Lexus, specifically the high-end trim Camry V6 and Avalon versus the ES350. My conclusion, after reading the opinions of several of you, is that the value contest is largely dependent on the final price, which, in turn, is dependent on the option packages one chooses. Given that the ES350 has more standard options and features, plus a better warranty than the Camry and Avalon, if you load up the Camry or Avalon to make them equivalent to the basic or lightly optioned ES350 with no or few additional options, the ES350 wins. If the ES350 is loaded and approaches $45,000, it loses.

    The point I want to raise here is that the value comparison may be more clear cut with the brands and models of other automotive groups. I should mention that I assign a decent weighting, albeit mostly subjective, on how cars age, in terms of image. While I take little note of five, 10 and 15 year old mass market cars, I always notice the luxury models. Example: A 10 or 15 year old C or E-Class Mercedes still looks good and interesting to me (assuming it's been reasonably well maintained). I may be the exception on this, but maybe some of you feel similarly.

    With this in mind, let's compare the VW Passat and the Audi A-4. I see the A-4 as the better value for someone who keeps his car for more than 3-4 years. If you trade more frequently than that, the Passat is the better value. I guess it would take too long to elaborate on all the reasons why this is my subjective conclusion, but appearance is an important factor for me. A new Passat looks good and fresh, while an older one, not so much. The A-4 retains its visual appeal for significantly longer. It also drives better.

    Granted, there are exceptions among mass market models, such as the '57 Chevy and the '65 Mustang, but I consider those to be too old to consider in this discussion.
  • hpmctorquehpmctorque Member Posts: 4,600
    I would guess that Hyundai will eventually establish a luxury brand, and move their current RWD models over to that brand. The reason is that it's easier to obtain higher prices and go head-to-head with the competing luxury brands than if you market your luxury models along side your mass market models.

    I think Hyundai tested the waters with it's luxury models. As they see that they can compete, they'll establish a luxury channel. Don't know if they'll do the same with Kia.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I think Kia is on Death Watch in the USA. I know, most people don't agree with me, but that's what I think. In Asia of course, different story.

    Speaking of Asia, it's possible that Hyundai is taking note of what some economists insist is "the future"---that the entire weight of global wealth, production and capacity will shift East in the next 25 years. In other words, the Twilight of the West---not disaster or ruin certainly not, but a shift to a new world out there somewhere.

    I can see this in terms of car production, as the USA and Europe are very "mature" markets---to sell a car here, you have to steal the sale from another automaker. Nobody in the USA or Europe "needs" another car.

    So with the rising upper middle class in Asia, and the declining upper middle class in America, maybe testing a luxury brand here in the USA for future marketing in Asia isn't such a bad idea.

    It's better than developing a car for Asia and trying to sell it here--that has never worked really well. It would be easier to possibly de-content a luxury car for Asia, than spiff up an Asian car for the USA.
  • corvettecorvette Member Posts: 10,236
    I had a current generation Escalade as a rental the last time I went out west. I felt like a complete tool driving it, and it was missing some features (like keyless ignition) that I thought would be standard on a luxury vehicle. Also, one of the gas struts popped off of the tailgate glass when I opened it. It drove quietly and unobjectionably enough, but at that price level, I don't think that's sufficient.
  • corvettecorvette Member Posts: 10,236
    The Passat has a nice interior and good driving characteristics. I see that VW is currently selling only one model of the Passat this year, with (I think) navigation as the only available option.

    The A4's interior is over-the-top for a mid-$30k vehicle. It used to be slightly smaller than the Passat (which itself was slightly smaller than other midsize sedans), but I'm not sure if this is still the case. I loved the A4 that I leased, and might lease one again if there were a similar killer lease deal, but I wouldn't want to own one (or a Passat) out of warranty.
  • j2jj2j Member Posts: 147
    edited October 2010
    "The Century can compete with Maybach? Where? Among rabid Japanese nationalists? The Maybach is priced pretty much in Rolls territory...does the Toyota compete there too, really?"

    ****
    I didn't bring up the Century to debate how it holds up against the Maybach, but rather to show that one can't simply go by nameplate in considering what is a luxury vehicle (let's try to say on topic, shall we?).

    The Lexus LS460 is generally considered a luxury sedan and a competitor to the S Class, 7 Series and A8.

    Otoh, the flagship of the Toyota lineup is not the LS460, but rather the Toyota Century - so one can't simply dismiss the Century as not being a luxury sedan simply b/c it is branded a Toyota (get the point?).

    And yeah, considering that the Century hasn't changed much over the decades, I'm sure the Maybach is the better car; but the Century, nonetheless, is a more luxurious sedan than the LS460.

    The Century is mostly handcrafted w/ a 48 valve V12 engine and amenities like powered side window curtains.

    The Century Majesty goes even further w/ the luxury and has things like marble runningboard and costs about $500K.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Well that might be Dubai's idea of luxury, but not America's.
  • j2jj2j Member Posts: 147
    So according to you, a Lexus 430 is "luxury", but the near-identical Toyota Celsior is not (even tho, the Celsior came w/ more amenities than the USDM LS430).

    OK - makes sense to me.
  • j2jj2j Member Posts: 147
    "I think Hyundai tested the waters with it's luxury models. As they see that they can compete, they'll establish a luxury channel. Don't know if they'll do the same with Kia."

    *****

    Kia has no plans for a luxury channel (there is no point since the RWD platform and V8 powerplant they would use comes from Hyundai).

    Kia is just going to bring over the Cadenza/K7 (large, upscale FWD sedan) to compete w/ the Maxima, Taurus, Avalon, Impala and Azera; but they do have a smaller, RWD sedan in the works which is going to be their sports sedan.
  • j2jj2j Member Posts: 147
    edited October 2010
    "I think Kia is on Death Watch in the USA. I know, most people don't agree with me, but that's what I think. In Asia of course, different story."

    ****

    OK - now you lost any credibility w/ that statement.

    Kia is not only one of the fastest growing brands in the US, it is already the 8th best-selling brand (not counting truck-based GMC) and has a 3.1% share of the US automarket.

    The Kia Sorento is a huge success (beating the Honda Pilot in YTD sales) and the Soul dominates its segment; the Forte/Koup and new Sportage also sell pretty well.

    But the new Optima will surpass all of that and do somewhere btwn 12-15K units monthly.

    And I don't quite understand all this talk about the US and EU being "mature" markets and hence Hyundai/Kia won't have as much growth opportunities.

    H/K will probably overtake Honda/Acura in US sales in 2012; they have already overtaken both Honda and Toyota in Canada and Europe.
  • j2jj2j Member Posts: 147
    "Does the JDM accept the Celsior as a luxury car more than a high value car? That's a good part of the answer."

    ****

    Yeah, the JDM is totally OK w/ the Japanese royal family riding in the "budget"/high value Century.

    The JDM accepts the Celsior, as well as the Crown Series and the Nissan President, Cima, etc. as being in the luxury segment.

    Just as Europeans don't see BMW or Mercedes being nearly a luxury brand as Americans do.
  • j2jj2j Member Posts: 147
    edited October 2010
    "Journalists don't get to decide what is a luxury car, nor to forums hosts. Buyers do, ultimately, along with the public's perception of the buyer and his/her decisions. "Successful" or "fool"?

    So we'll see who pays $60K for a Hyundai and if the "luxury" label really sticks, or is dismissed by public perception."

    ****

    Well, considering that buyers are purchasing more Genesis sedans than the Lexus GS, Infiniti M and Audi A6 - I guess that means the latter 3 aren't "luxury."

    Also, considering that the Maybach has bombed in the US (and pretty much every other market), I guess that means the Maybach isn't luxury as well.

    ****

    "The LS400 was an instant luxury car, not in spite of its lower price, but because the Mercedes was so grossly overpriced.

    Here again, the general public didn't vote the Benz OUT of the luxury market, but voted the Lexus IN. The LS400 was an impressive debut and nobody said '$35K for a Toyota??'"


    ****

    Nice spin job.

    And oh, there were many comments at the time the LS400 launched about the Lexus being a Toyota; the only thing that got them to overlook it was the ridiculously low MSRP.

    Also, I guess that means the LS460 isn't a luxury sedan in Europe due to its poor sales in relation to its competition (selling about as well as the Phaeton).

    Otoh, I guess the LS460 is more luxury than the Audi A8 in the US, since it handily outsells the A8.
  • fintailfintail Member Posts: 57,092
    edited October 2010
    The Century is luxury no doubt, but somehow without the prestige. Nobody outside of Japan would recognize it, and likely most people there have never seen one. More like an overdone curiosity, a homebuilt version of a Mansory Rolls or something. It might be more luxurious than a LS, but is it a better car?

    I doubt the Dubai set would care for it, too old,
  • fintailfintail Member Posts: 57,092
    edited October 2010
    Lexus dumped the LS way under cost no doubt - price shot up almost immediately after the US market embraced it, no coincidence.

    To be fair, the GS has never sold well, and the Genesis undercuts the Audi especially by tens of thousands of dollars. Hard to call it an apples to applies comparison.

    The US market doesn't define luxury - no market alone defines it, and JDM is probably the least relevant of the developed world. The Germans still run the show on a global basis in the high priced realm, and I don't see this changing anytime soon - hell, sales continue to climb for the highline brands.

    You can spend a day in a posh area of London or Paris or Berlin or Zurich and not see a LS...yet there's a new style LS in the garage of my fairly ordinary apartment building. It's a tough one to embrace outside of NA.

    I think what this all comes down to is that luxury has a definite subjective component, both in the eyes of the owner and the person walking by.
  • lemkolemko Member Posts: 15,261
    A Century can compete with a Maybach? I might be one of Buick's ultimate fans, but even I wouldn't make that claim! :P

    image
    image
  • lemkolemko Member Posts: 15,261
    Oh, you meant this Century?

    image

    Kind of looks like somebody crossed a W116 Mercedes with my 1989 Cadillac Brougham.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Toyota Century -- That might be luxury to the early Russian mafia, who were used to riding around in surplus army tanks for a long time, but this car would be laughed out of Europe and America I think.

    KIA --Kia has a number of big problems related to the USA market. For one, the resale value of their cars is dismal, and that certainly doesn't go unnoticed by consumers; two, their unions are notoriously belligerent, and the company is beset annually by crippling strikes---this suggests future interruptions in inventory in the US, a situation that few franchised dealers will tolerate; third, Kia competes with its parent company Hyundai--takes sales away from them, in other words; fourth, Kia doesn't have enough USA manufacturing infrastructure, and even with good sales, shipping cars from Korea is going to get more and more expensive.

    Remember, Renault outsold VW in the USA for a while, too, but the product wasn't good enough, parts and service were marginal.

    Anyway, we'll see. Sure I could be wrong, but to say KIA has no problems is I think way too pollyanna a view of their situation.

    HYUNDAI EQUUS --- they have some very clever marketing ideas for this car, such as a pretty good entry-level price for a very well-equipped car; free iPad to help you contact the dealer, etc.; courtesy shuttle to your home; free loaner; 4-seat chauffeur model available.

    Downside? The Hyundai badge; rather blah styling; nothing special in engine performance.

    True, cheaper than the big BMWs and Audis, but they'll blow you away.
  • corvettecorvette Member Posts: 10,236
    The rumor is that they're working on a better engine for the Equus. Of course, that's kind of a way for Hyundai to shoot themselves in the foot (don't buy our new Equus because there's a better one coming out in a year or two). VW did the same thing when they introduced the 2005 Jetta--the only engine available was the uninspiring, underpowered, and uneconomical 2.5 liter five-banger.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    That engine issue definitely needs to be addressed. They're using the Genesis engine. How would you like a 3 series BMW engine in your 7 series BMW? Probably not much.

    KIA --- there was a hot shot foreign car company in the 1980s that in one year became the 3rd largest selling European car in the USA market, behind BMW and Mercedes---it was called the YUGO.

    If Hyundai's plan would be to a) build a new Kia plant in the USA and b) drop the Accent and Elantra and not build a substitute, thereby giving that low end market to Kia and c) move their entire product line upscale, starting with Sonata on up----well then I might change my mind about Kia's future in the USA.
  • berriberri Member Posts: 10,165
    The Germans still run the show on a global basis in the high priced realm, and I don't see this changing anytime soon

    I think what this all comes down to is that luxury has a definite subjective component, both in the eyes of the owner and the person walking by.

    The Germans' make some nice vehicles, although not always the most reliable. However, don't you think bias and stereotyping enter into it? In the old days Caddy was aspired to, but during the short Kennedy family and Camelot era their affinity toward Lincoln's had to help the new 61/62 Continental sales surge. Nowadays, I think Americans feel German's are the best automotive engineers, Asians are copycats and Americans are incompetent. Not necessarily true, but what the heck? The Chinese are getting into German cars now because they are status symbols in the West ... and so it goes.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Well there might be bias and stereotyping going on NOW but Americans got those biases originally from some very valid data. One only need take a spin in a 1989 Mercedes SL and a 1989 Cadillac Allante to have the whole thing laid out before you---or a 560SEL vs. any big American car of the same year. It's pretty shocking to compare. Now, it's still there--the difference---but it's much more subtle.

    Yep, I agree. The Germans define luxury to the world, the others just follow along.
  • andre1969andre1969 Member Posts: 25,652
    a Hyundai Genesis sedan out on the streets this afternoon. Well, actually, in the parking lot at CVS. At first, I didn't even pay attention to it. It was gray, and intially I just thought it was one of those Bangled-up BMW 5-series. But then when I went into the store, and walked in front of it, the grille caught my eye...that's when I noticed...that ain't no BMW!
  • fintailfintail Member Posts: 57,092
    And the funny thing is, the SL platform was 17 years old then! Heck, the W126 was 6 years old when the 560 hit these shores, and it still blew everyone away.

    Regarding the stereotyping, sure it's true, but where there's smoke, there's fire.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    The new Cadillacs are pretty nice. They've come a long, long way to shed their image of vulgarity--another stereotype they had to shake off, thanks to fake landau bars and steer horns, etc. Man, Cadillac has had to carry some very heavy karma. It doesn't seem fair for one marque to bear all that bad ju-ju.

    Of course, Hyundai shook off its bad ju-ju pretty much. So it can be done.
  • fintailfintail Member Posts: 57,092
    It can be done, but at the same time, that doesn't mean a maker can built something with the styling (and likely driving dynamics) of the Equus and expect it to be embraced on par with S/7/a8/LS and so on. I think sometimes a maker overestimates their rebirth - see Caddy XLR.
  • hpmctorquehpmctorque Member Posts: 4,600
    edited October 2010
    Brands don't remain static. Genesis, and even more so Equus, are in their infancy. I think we should wait until the second generation to judge whether they'll remain a low cost knockkoff, or become worthy competitors to the established luxury brands.

    Whether Hyundai's RWD premium models remain part of the Hyundai brand, or are spun off into a separate luxury brand, as Infiniti has done, they'll have to overcome the heritage and first mover advantage of the German brands. While these are significant headwinds, I think it's too early to count the Koreans out.

    I've wondered whether Hyundai's subconscious aim may be to settle some old scores by beating the Japanese brands.
  • iluvmysephia1iluvmysephia1 Member Posts: 7,704
    edited October 2010
    question mark! Heck, the South Koreans are eating the lunches of many a carmaker now. I frankly don't know why the Germans are even narily in the fight to sell compacts, much less luxury cars right now.

    If I wanted a luxury car right now I'd either buy a midsize Suzuki Kizashi (winning awards left and right for being a driver's midsize car-look it up if you don't believe me) or a Genesis sedan from Hyundai. Not a German.

    I'd buy a Toyota Boat...oh...I mean Avalon before I'd buy any German luxo car. They're over-rated and overpriced and over-hyped. Kind of like Lady Gaga.

    No, I don't know if she's overpriced. That is a bit of a stretch to assume that, eh?

    2021 Kia Soul LX 6-speed stick

  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    If the Kizashi wants to be a "luxury" car then we need a new word to describe a Mercedes S Class and similar cars, in the same way that if we call a 20 story building a "skyscraper" the what do we call larger buildings? I mean, is Tony Danza really "famous"? :P
  • steverstever Guest Posts: 52,454
    edited October 2010
    I think a lot of the problem is that no one agrees on the definition of luxury, or whether it can apply to a car or must it apply to the whole brand.

    A lot of luxury features a decade or two ago are now standard equipment which makes it all a bit of a moving target.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    edited October 2010
    Well it's like the old joke----if some unemployed laborer gets inspired, cleans himself up, buys new clothes and starts working as a shoe store manager, we admire him---but if a former CEO gets a job doing the same thing, we take pity on him.

    So yeah, for a Hyundai, the Equus is a luxury product, but for a Mercedes, that same car would be a down-market product.

    So one's view of "luxury" depends on from where one is viewing it.

    Just labeling something doesn't make it so.
  • steverstever Guest Posts: 52,454
    edited October 2010
    but for a Mercedes, that same car would be a down-market product.

    Like their taxis, A Class, B Class, "executive" cars, Sprinters, smart cars, lorries, etc?

    For all I know, Tiffany may sell refrigerator magnets too. ;)
  • fintailfintail Member Posts: 57,092
    edited October 2010
    Kizashi, a luxury car? A mostly FWD car with mass market VW-esque styling? With all due respect....puh-leeze :P

    Here's something for you to do. Go out to a local dealer and drive the luxury market leaders - LS, S, 7, A8. You don't even have to drive a new one. You can find 5 year old examples of any of these for 30K, or 10 year old examples for no more than 15K. Go drive one for an hour, put it through some tests, and get back to us.

    Germans rule the luxury roost, both on this continent and on this planet. In other markets, smaller German cars also find plenty of buyers, and even here people have no problems buying what could be the greatest new car gamble, a VW.
  • fintailfintail Member Posts: 57,092
    The thing about the lower line cars is that they don't pretend to be anything but what they are.
  • steverstever Guest Posts: 52,454
    And does the Equus need to pretend to be something other than it is?
  • fintailfintail Member Posts: 57,092
    Yes, over time there is evolution, but I think fanboys or nationalists get a little ahead of themselves, especially lately. Judging by some stuff that has been posted on this forum, the German and Japanese highline models might as well stop production now. I wouldn't count the Koreans out - especially if H can nail down large car design and suspension tuning... but I find it hard to automatically look at something like the Equus as the new LS instead of a new Phaeton. Saying "wait a year for the better engine" is pretty much a handicap, too.
  • fintailfintail Member Posts: 57,092
    What is it, exactly? According to some, it is equal to an S/LS/A8/7.
  • steverstever Guest Posts: 52,454
    What is it, exactly?

    Why, it's a luxury car. :)
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    yes but a Mercedes garbage truck says what it is, right on the side :P

    Mercedes makes work pants as well as designer jeans.
  • steverstever Guest Posts: 52,454
    edited October 2010
    So, Mercedes is a brand name of a company that happens to make, among other things, luxury automobiles. It doesn't follow that they are a luxury brand then, eh?

    Can a garbage truck be luxurious?
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    relative to other garbage trucks, I suppose so, but relative to a Bentley Arnage, no.
  • steverstever Guest Posts: 52,454
    edited October 2010
    And what if someone wonders if an interior shot of the rear seats in an Equus could possibly be taken in a Maybach, as recently happened over in Mystery car pix....?

    Or will people just fixate on the brand and ignore the actual vehicle idling in front of them? That's just a garbage truck - oh wait, it's a Mercedes, must be a nice one.
  • fintailfintail Member Posts: 57,092
    Well, if the person has never seen a Maybach before, or has no memorized knowledge of one, how are they to know?

    There's more to it than brand, there's a design element to it too.
  • fintailfintail Member Posts: 57,092
    That it is, in the eye of the beholder especially. Is it the same as a S/7 etc? Or an E/5? Or what? Luxury cars are subjective, and are very categorical - maybe an endless amount of classes.
  • houdini1houdini1 Member Posts: 8,327
    edited October 2010
    Well practically speaking, currently there are 3 mainline luxury autos in the U.S. The LS, the S, and the 7, with the 7 being a.w.o.l. for the last few years. That just leaves the LS and the S. Two very fine automobiles that take turns winning comparisons, but as far as VALUE goes I would have to give the nod to the LS.

    The LS costs about $20 grand less than the S when new, but after 4 or 5 years they are worth about the same, or very close. To me that equates to better value. Just because I drive an LS doesn't mean I'm biased. I forgot the A8 and it is also a viable contender.

    I have an open mind about the Equus and I hope it is a roaring success.

    2013 LX 570 2016 LS 460

  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    edited October 2010
    But a Maybach shopper will know, and that's what counts.

    I'm rooting for Hyundai, too, to make a splash. Competition improves the breed! Look what Lexus did for Mercedes after all.......

    If I were appointed King of Hyundai, what I'd do is:

    1. Ditch the Hyundai name. Call the new marque "Genesis" or similar

    2. Put in an engine that's worthy of a world class luxury car. This means POWER to crush you back in your seat. Maybe even twin-turbos or a SC on the Genesis V8 would work, if Hyundai doesn't want to develop a new engine (very $$$ to do that).

    3. Continue to coddle and seduce new customers as they've been trying to do, with valet services, free iPads, free loaners, even fitted luggage, champagne in the truck, personalized owners manuals, you name it---pour on the glitz.

    4. If the car sells in reasonable numbers after 2 years, add 20% to the price and build a LWB version.

    5. Do something with the styling.
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