Some Luxury Buyers Downshift to Hyundai Genesis

[speedflex]

Some Luxury Buyers Downshift to Hyundai Genesis
By Steve Finlay

WardsAuto.com, Apr 14, 2009 8:45 AM

NEW YORK – Conspicuous consumption has taken a back seat during these hard times, and an apparent beneficiary of that is the Hyundai Genesis, introduced last year as an affordable upscale sedan.

Starting at $32,250, it has drawn buyers who until recently might have opted for more costly prestige cars, such as the Mercedes-Benz S-Class (stickered at $89,350 and up), says John Krafcik, president and CEO of Hyundai Motor America.

Such a downshifting in consumer preferences may be tied to today’s public disdain of perceived excesses, from Wall Street bonuses to corporate jets. If there’s a time for flaunting it, it’s not now.

So, the Genesis becomes an understated luxury for many affluent consumers who want to avoid overt displays of extravagance and status, Krafcik says.

“A huge number of Genesis buyers are coming from premium brands,” he says at the auto show here, where Hyundai unveils its Nuvis concept cross/utility vehicle. It also displays the Equus, a costlier car than the Genesis, but only sold in South Korea, Hyundai’s homeland. Ward’s has reported Hyundai hopes to sell the Equus in the U.S. in about two years.

“A lot of people, who a year ago strove for prestige brands, now want to be less conspicuous, less ostentatious,” he says.

Speaking to journalists, Krafcik cites a hypothetical example of an executive at a financially ailing newspaper choosing not to lease another BMW 7-Series while staffers are making sacrifices to keep the publication afloat.
Hyundai Genesis conquests premium buyers.

He tells of an Aston Martin owner who traded in that ultra-luxury vehicle for a Genesis at a Carlsbad, CA, dealership. “I think it’s a bit of reverse social stigma,” Krafcik says.

There are previous cases of that in automotive history, such as how early Buicks got nicknamed “the doctor’s car.”

Back when physicians made house calls, many of them shunned driving Cadillacs, General Motors Corp.’s top-line car, lest arriving in one would elicit clucks from bill-paying patients. Instead, doctors drove GM’s next-best make: Buick. It offered nearly as many accouterments as Cadillac, minus the high-brow image.

Since the vehicle went on sale last June, Hyundai has sold 6,167 units in 2008 and 3,945 units in the first three months of 2009, according to Ward’s data. Its market share in the lower luxury-passenger car market has climbed to 3.57%.

Along the way, the car has garnered various awards. It was named North American Car of the Year at the Detroit auto show. Its V-8 is one of Ward’s 10 Best Engines for 2009.

Genesis has buffed up the overall Hyundai brand, which in the U.S. once was strictly entry-level and a dubious player at that. There’s the story of a Hyundai salesman who, on a demo drive with a customer in an ’86 Excel, had to turn off the air conditioner to conserve enough power to get up a hill.

Ninety-two percent of Genesis shoppers never considered a Hyundai until the Genesis, Krafcik says. “Seventy percent of Genesis owners never owned a Hyundai. So those are all conquest buyers.”

http://wardsautoworld.com/ar/luxury_...nshift_090414/

[1SICKLEX]

Its the perfect car for these times. Most all the luxury of Tier 1 brands without the badge.
This can be "spun" though as maybe 1 S-class got traded in and they are acting like dozens have been traded in We don't know the numbers.

Having driven it recently, I was very impressed. I mean a Hyundai? Amazing effort.

Oh I'm back so lmfao that Acura can't figure this out buy Hyundai can

[rdgdawg]

Originally Posted by 1SICKLEX

Its the perfect car for these times. Most all the luxury of Tier 1 brands without the badge.
This can be "spun" though as maybe 1 S-class got traded in and they are acting like dozens have been traded in We don't know the numbers.

Having driven it recently, I was very impressed. I mean a Hyundai? Amazing effort.

Oh I'm back so lmfao that Acura can't figure this out buy Hyundai can

At some point every day I try to "pulverize" my Sonata, but it just laughs at me, runs great in the snow, transports kids, friends, and clients, and gets a legitimate 28+mpg at 75 mph... why the hell am I getting rid of this car again???

Oh yeah, it's not quite a sports sedan

[Brian231]

That car looks great on the road. You can't beet the price and 10 year warranty!!! Looks like a Mercedes in the front and newer Lexus LS rear. Nice interior I have to add.

[JKA.nyc]

I have a hard time believing that someone who could previously afford a 100k+ Aston Martin would trade it in for a Genesis, unless that Aston Martin was in really bad shape and really old he should have been able to get 2, or 1 plus a Sonata.
I could see people going from like a E/5/GS/A6 to a Genesis, but anything beyond that seems like a bit of a stretch, considering they don't mention MY's I'm guessing all the cars that were traded in were 10+ years old.

[Brian231]

Originally Posted by JKA.nyc

I have a hard time believing that someone who could previously afford a 100k+ Aston Martin would trade it in for a Genesis, unless that Aston Martin was in really bad shape and really old he should have been able to get 2, or 1 plus a Sonata.
I could see people going from like a E/5/GS/A6 to a Genesis, but anything beyond that seems like a bit of a stretch, considering they don't mention MY's I could imagine all the cars mentions are 10+ years old.

Someone who wants reliability and long warranty (lol)!!! Does seem like a long stretch.

[Lexwang07]

Originally Posted by JKA.nyc

I have a hard time believing that someone who could previously afford a 100k+ Aston Martin would trade it in for a Genesis, unless that Aston Martin was in really bad shape and really old he should have been able to get 2, or 1 plus a Sonata.
I could see people going from like a E/5/GS/A6 to a Genesis, but anything beyond that seems like a bit of a stretch, considering they don't mention MY's I'm guessing all the cars that were traded in were 10+ years old.

Sometimes, people short on money, they'll trade in anythings. the things like car, house, and etc.

[LexBob2]

In March, Hyundai sold 1,626 Genesis in North America.

YTD thru March, 3,946 (about 1,300 per month avg.).

Not a game changer yet, but a decent number of cars I guess, considering the state of the economy.

[Brian231]

Originally Posted by LexBob2

In March, Hyundai sold 1,626 Genesis in North America.

YTD thru March, 3,946 (about 1,300 per month avg.).

Not a game changer yet, but a decent number of cars I guess, considering the state of the economy.

Thanks for posting these sales numbers, I was about to look these up!!

[06TLDude]

Originally Posted by LexBob2

In March, Hyundai sold 1,626 Genesis in North America.

YTD thru March, 3,946 (about 1,300 per month avg.).

Not a game changer yet, but a decent number of cars I guess, considering the state of the economy.

Those numbers are pretty low considering the hyping of the Genesis sedan. So far I consider the Genesis sedan a flop. This isn’t to say it isn’t a good car, but consumers don’t want to pay premium for a Hyundai and their not (look at the numbers).

[mmarshall]

Originally Posted by 06TLDude

Those numbers are pretty low considering the hyping of the Genesis sedan. So far I consider the Genesis sedan a flop. This isn’t to say it isn’t a good car, but consumers don’t want to pay premium for a Hyundai and their not (look at the numbers).

The economy also plays a big part. It's not just the car. It will be interesting, though, to see what happens to the Genesis numbers after Hyundai's new policy of covering for potential job losses and payment default is given some more time.

(Ford, BTW, has announced a more-or-less similiar plan)

[FKL]

Originally Posted by YEH

My point isn't that the Asian market doesn't like BMWs and Mercedes (who doesn't?), but rather that people in Japan and SKorea have no problem driving a "luxury" car from Toyota, Honda, Nissan, Hyundai, Samsung, etc. since they are seen as "full-line" manufacturers (think of them as GM w/o the sub-brands of Caddy, Buick, Chevy, etc.).

No, this is wrong. "German" cars have an almost mythical status in Asia, especilly in Japan and South Korea. Anyone willing to make a statement of their wealth goes and buys a German luxury sedan. They are from the "land of the Autobahn", they are perceived as having superior engineering, however fair or unfair that may be. Lexus and Acura have tanked in Japan, even with all it's nationalistic pride. The same holds true in S. Korea as well, who have absorbent import tarrifs to subsidize Hyundai.

Here's a great Business Week piece

Why Toyota's luxury lineup is getting little traction at home—while German brands remain an obsession

When Toyota (TM) introduced its Lexus brand in Japan three years ago, the company was hoping drivers like Masayoshi Haku would swoon over the luxury lineup. The 46-year-old doctor is a car lover with a $110,000 BMW 750 sedan and a $60,000 Porsche Boxster, so he should have been a prime customer for Lexus. But Haku hasn't taken the bait. Why? Lexus is too Japanese for his tastes. "Lexus makes excellent cars. But if you ask me whether I'd buy one, the answer is no," says Haku. "Foreign brands have more individuality."

For most Japanese car buyers, "foreign" really means "German." Although Lexus hit American showrooms 19 years ago and has been the top-selling luxury nameplate in the U.S. since 2000, it didn't arrive in Japan until 2005. By that time German brands dominated the high end, and Lexus has had a tough time getting a toehold, reaching only 60% of Toyota's initial sales projections. In 2007, Lexus moved 34,800 cars—about what it sold in December alone in the U.S.—and sales so far this year are down.

A big problem was the initial lineup. The company started with just three models: the $52,000 GS sports sedan, the $68,000 SC convertible, and the entry-level IS sedan, starting at about $40,000. All three had previously been available in Japan under the Toyota nameplate—for about 20% less than the Lexus models.

Worse, the buzz Toyota created for Lexus may have benefited the Germans. Following the Lexus launch, rivals say they saw increased interest as customers then visited BMW, Mercedes-Benz (DAI), and Audi (VLKAY) showrooms to compare. "The introduction of Lexus is energizing the luxury car market," says Ashvin Chotai, an independent auto consultant. But few customers have steered away from the German makes. Chotai says 80% of early Lexus buyers were former Toyota drivers; only 5% came from Mercedes or BMW. "Getting Lexus accepted as a bona fide luxury brand seems to be a lot harder in Japan than in the U.S.," says Chris Richter, an auto analyst at brokerage CLSA. "It's one of the rare times Toyota has stumbled."

Japan's German-car obsession shouldn't have been news to Toyota. Wander through Tokyo's upscale wards and you'll find no shortage of expensive German models, even though they're often too big to comfortably navigate Japan's narrow streets. And many of them have the steering wheel on the left, the European standard, rather than on the right, Japan's norm. "I wanted to drive an authentic BMW, like the ones in Germany," says Yoshihiro Nakahashi, who runs a Web site for BMW fans and pilots a left-hand-drive BMW 320si.

[1SICKLEX]

Originally Posted by FKL

No, this is wrong. "German" cars have an almost mythical status in Asia, especilly in Japan and South Korea. Anyone willing to make a statement of their wealth goes and buys a German luxury sedan. They are from the "land of the Autobahn", they are perceived as having superior engineering, however fair or unfair that may be. Lexus and Acura have tanked in Japan, even with all it's nationalistic pride. The same holds true in S. Korea as well, who have absorbent import tarrifs to subsidize Hyundai.

Here's a great Business Week piece

Why Toyota's luxury lineup is getting little traction at home—while German brands remain an obsession

FKL, there is no Acura in Japan. Only Lexus. Acura tanked in China. Lexus became the #1 selling luxury brand in China passing Mercedes momentarily last we heard.

Japan is very very brand oriented. Thanks for the link.

[JKA.nyc]

The whole Aston Martin to Genesis thing sounds shady to me, I'm sure technically the CEO is telling the truth but I'm taking it in the same vain as when Clinton said "I did not have sexual relations with that woman" with a whole bunch of technicalities involved, for all we know the guy traded in a shell.

Good psychological marketing tactics by Hyundai though as most people probably don't think twice about it and automatically assume this guy is talking about recent MY Aston Martin, 7's and S's etc etc and are thinking "Damn, the car is that good?"

[werewolf]

Originally Posted by JKA.nyc

I have a hard time believing that someone who could previously afford a 100k+ Aston Martin would trade it in for a Genesis, unless that Aston Martin was in really bad shape and really old he should have been able to get 2, or 1 plus a Sonata.
I could see people going from like a E/5/GS/A6 to a Genesis, but anything beyond that seems like a bit of a stretch, considering they don't mention MY's I'm guessing all the cars that were traded in were 10+ years old.

Probably works in real estate and has watched his bubble wealth evaporate...