Gojirra99

Monday, November 8, 2004

Hyundai, Toyota engage in price war over coupes

By John O'Dell / Los Angeles Times

South Korea's Hyundai Motor Corp. has long competed in the United States as a low-cost alternative to increasingly pricey Japanese cars. The problem is that mighty Toyota Motor Co.p. is starting to undercut Hyundai on price.

Consider their two rival sport coupes.

Hyundai's youth-oriented model is the Tiburon. But its market share is being threatened by a new offering from Toyota's hot-selling Scion brand. Auto reviewers have been raving about the 2005 Scion tC as a bargain that is also fun to drive.

So Hyundai Motor America Inc., the Fountain Valley, Calif.-based import arm, has now slashed the sticker price of its 2005 Tiburon coup by about $1,000 to match the Scion tC.

Word of the price war has leaked out in recent days.

Toyota is a master "at manufacturing efficiencies, including maximizing economies of scale by sharing components among models," said Wes Brown of Los Angeles market research company Iceology. "This is a perfect example."

Indeed, even after Hyundai's cut, the Tiburon's new base price of $16,539 remains slightly higher than the $16,490 that Toyota charges for its standard Scion coupe.

Hyundai product planning chief John Krafcik said the company also will offer a cash-back incentive so the Tiburon, which is set to hit dealer showrooms by the end of the month, "very likely will cost less than the Scion."

On the plus side, the Hyundai coupe is roomier than the Scion, and comes with the company's 10-year, 100,000-mile powertrain warranty. Scion's warranty is for three years or 36,000 miles.

But the Scion offers a number of standard features, including anti-lock brakes and 17-inch alloy wheels, that cost extra on the Tiburon. And particularly important to many, the Scion has more power.

Yet the most telling disparity between the two cars is in their sales: By the end of October, after only four months in the United States, 19,667 tC coupes had sold. That blew past the 17,484 previous Tiburon models purchased since January.

Trexus

Toyota all the way. Toyota can compete with Hyundai and win. Toyota is very large and can save cost by sharing parts from other models. Toyota should increase the lenght of the warranty to come close or match Hyundai's. In the end it goes to show that Toyota will be number one.

mmarshall

I'd rate the two cars a toss-up on fit-and-finish and general overall quality....though the tC probably has a little better drivetrain, both efficiency and durability-wise. The tC also has a lot of dealer add-ons that Hyundai doesn't offer, like the body / trim parts and the TRD supercharger.
Hyundai's warranty, though, just blows Toyota away....and Hyundai plans to keep that new-car warranty until at least 2008. I agree with terxus that Toyota is going to have to address this sooner or later.

Now...on price. What has also got to be taken into consideration that all new Scions (including the tC) sell for full list...no incentives or discounts, Saturn-style. So....while this, of course, prevents dealer price-gouging and makes it very simple for first-time car buyers (one of Scion's obvious targets)....... it also prevents any discounts as well because you cannot deal on one. The Tiburon, of course, is not only low-priced to start with....but you can bargain on them, and Hyundai sometimes offers factory incentives as well. So, in many cases, the comparable Tiburon will actually go out the door for less money...sometimes much less....than the tC will....and with a longer warranty.

LexFather

Believe it or not the Tiburon ain't bad at all. But sadly for them Hyundai still has image issues to repair. Scion being Toyota made=nuff said for most. And its' cheaper. No brainer for most.

The TC has features the Tiburon doesn't. The TC is just a coupe killer. I can imagine who would buy a Civic coupe now unless gas mileage and proven reliability are tops on your list.

mmarshall

Cheaper? Maybe...maybe not. See my previous post. Scions sell for full list. Tiburons don't...you can bargain.
I agree that the tC probably has a better drivetrain. Other than that, the cars IMO are a toss-up....especialy in fit-and-finish.

-J-P-L-

Although I'm confident in Hyundai's new level of quality, I still know that they can't touch Toyota quality and they never will (as Toyota will always improve themselves). If you've seen the tC's interior, you know that fit and finish and quality isn't even close. The Scion looks much more expensive.

I know Hyundai is doing very well with initial quality ratings of their newest products, however, I think we should hold off our true judgement with long term durability. Look at both of these vehicles in 10 years with 150K on them and tell me which one is holding up much better. Scion!

Hyundai's longer warrenty doesn't mean it will be as or more dependable as a Toyota product.

mmarshall

I agree that Toyota makes a better engine and transmission. Other than that I don't see much difference between the two cars...especially in fit-and-finish, but each to his own. But....you're correct that the real test will be in 10 years.