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The Value Proposition of Luxury Brands
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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??"
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.
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.
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.
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.
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.
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.
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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.
OK - makes sense to me.
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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.
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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.
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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.
So we'll see who pays $60K for a Hyundai and if the "luxury" label really sticks, or is dismissed by public perception."
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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.
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"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??'"
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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.
I doubt the Dubai set would care for it, too old,
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.
Kind of looks like somebody crossed a W116 Mercedes with my 1989 Cadillac Brougham.
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.
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.
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.
Yep, I agree. The Germans define luxury to the world, the others just follow along.
Regarding the stereotyping, sure it's true, but where there's smoke, there's fire.
Of course, Hyundai shook off its bad ju-ju pretty much. So it can be done.
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.
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
A lot of luxury features a decade or two ago are now standard equipment which makes it all a bit of a moving target.
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.
Like their taxis, A Class, B Class, "executive" cars, Sprinters, smart cars, lorries, etc?
For all I know, Tiffany may sell refrigerator magnets too.
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.
Why, it's a luxury car.
Mercedes makes work pants as well as designer jeans.
Can a garbage truck be luxurious?
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.
There's more to it than brand, there's a design element to it too.
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
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.