Some Luxury Buyers Downshift to Hyundai Genesis

[IS-SV]

Badges matter unfortunately and any auto company interested in making a profit understands this.

But a badge needs to be backed up with substance and solid product(s).

[JKA.nyc]

Originally Posted by 1SICKLEX

The imaginary world where "badges don't matter" is just that imaginary.

This is what I've been trying to say since forever in that other Hyundai thread way back but the Hyundai trolls refuse to accept it!!!!

In this imaginary world where badge doesn't matter, I'm sure there's peace on earth, food for everyone, no disease, pain or suffering etc etc you get the idea.

In all seriousness though if you think about it;

in a world where badge/branding didn't matter there would be no need for any differentiation between anything from clothes to food to electronics. therefore there would be no need for different brands and everything would be produced by one producer and we'd all consume the exact same things, and therefore there would be no need for people to be paid differently if we bought all the exact same things priced the same and so on and so forth and all this sounds a little like communism doesn't it?

[YEH]

Originally Posted by JKA.nyc

This is what I've been trying to say since forever in that other Hyundai thread way back but the Hyundai trolls refuse to accept it!!!!

Uhh, I seem to recall the "debate" was over whether the Genesis was a "luxury" vehicle, not whether it was more prudent to have a separate luxury nameplate for the US market.

Aside from the fact that Infiniti and Acura don't exist in Japan, as did Lexus until a few years ago, the Toyota Crown Majesta was classed even higher than the Toyota Celsior (aka the LS) and Japanese royal family ride in a "lowly" Toyota instead of a Lexus (the Toyota Century Royal).

I also seem to recall many posters here stating that it was silly to think that the Land Cruiser wasn't a luxury vehicle simply b/c it was a Toyota (esp. considering that it carries a $65k price-tag) and that the Lexus LX, basically a rebadged Land Cruiser, was "luxury" simply b/c it had a different nameplate.

In addition, Mercedes manufactures the econobox A and B Classes - are they "luxury" vehicles simply b/c they carry the Mercedes nameplate?

Originally Posted by JKA.nyc

In this imaginary world where badge doesn't matter, I'm sure there's peace on earth, food for everyone, no disease, pain or suffering etc etc you get the idea.

It's not imaginary in Asia or Europe and again, the nameplate has little bearing on the actual quality/merits of the product.

Also, no one is arguing that the US market, for optimal sales and success, requires a luxury nameplate, but automakers have been able to have successes w/ one 'halo" model (Chevy w/ the Corvette, VW w/ the Passat CC, likely Nissan w/ the GT-R, etc.) and it just simply wasn't prudent for Hyundai to invest a billion and a half to start a new prestige nameplate based on just the Genesis sedan and coupe.

Originally Posted by JKA.nyc

in a world where badge/branding didn't matter there would be no need for any differentiation between anything from clothes to food to electronics. therefore there would be no need for different brands and everything would be produced by one producer and we'd all consume the exact same things, and therefore there would be no need for people to be paid differently if we bought all the exact same things priced the same and so on and so forth and all this sounds a little like communism doesn't it?

Branding often has little to do w/ the actual quality of the product (it's amazing what marketing can do).

For instance, a few decades ago, Rolex and Omega were seen as being much closer whereby the Rolex Submariner and the Omega Seamaster were not that different in price (in terms of quality, the Sub is better in some respects and the Seamaster in others - so it's basically a draw).

Nowadays, due to better marketing and a strict price control, the Sub is close to being twice as much as the Seamaster.

Along the same lines, most people (aside from watch aficianados) would ooh and aah at a Rolex watch and draw blank stares at a Patek Philippe, Jaeger-LeCoultre or a Vacheron Constantin.

Along the same lines most people (due to the all the $$ spent on marketing) would ooh and aah at a Bose sound system, while thinking that JBL was just run of the mill - nevermind that pretty much all audiophiles would scoff at a Bose system and wouldn't mind having the top of the line JBL floorstanders (which run $20k) in their listening room.

[MPLexus301]

Originally Posted by 1SICKLEX

Lexus has offered more and more priceier vehicles that people do buy. People feel the badge warrents the price.

On a sidenote...

People may not realize it, but the LX 570 is now an $85-90K vehicle...probably around $100K OTD with TT&T.

LS 460Ls roll off the line at $80K, $90K, and LS 600hLs often go for $115,000 or $120,000.

LF-A will arrive sometime soon and is rumored to sticker anywhere from $175,000-$300,000.


Lexus has made significant strides in brand cache in just the last few years.

[tex2670]

Originally Posted by 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/

Sorry--I'm not buying this marketing effort. He cites to ONE "real" example of an AM owner, and one "hypothetical" (read: not real) example of a 7 Series owner, and suddenly a "huge number" of people are dumping $70-80K+ autos for a Genesis? I highly doubt it.

It's a nice car, and I'm willing to bet they get a lot of people considering lower end lux models and fully loaded family sedans as conquest customers. But droves of S-Class shoppers flocking to Hyundai? Pure fiction.

[IS-SV]

Originally Posted by tex2670

Sorry--I'm not buying this marketing effort. He cites to ONE "real" example of an AM owner, and one "hypothetical" (read: not real) example of a 7 Series owner, and suddenly a "huge number" of people are dumping $70-80K+ autos for a Genesis? I highly doubt it.

It's a nice car, and I'm willing to bet they get a lot of people considering lower end lux models and fully loaded family sedans as conquest customers. But droves of S-Class shoppers flocking to Hyundai? Pure fiction.

I agree. The competition in the same price range of the Genesis should be the ones that are concerned the most.

[1SICKLEX]

^^^ Sonata is a great daily/family car. Doesn't need to be sporty. Hell most cars don't.
Genesis coupe can be

[toy4two]

I saw my first one parked at work today and had to do a double take, I thought it was a Lexus. They absolutley nailed it.

[The G Man]

Poeple laugh at Lexus too when they 1st came out, they say its nothing more than a Toyota with leather seat or Lexus is a MB or BMW want to be. The Gensiss is a good start, Hyundai need to continue with the luxury brand comittment. One day people will take a Luxury Hyundai sedan seriously.

[1SICKLEX]

Originally Posted by The G Man

Poeple laugh at Lexus too when they 1st came out, they say its nothing more than a Toyota with leather seat or Lexus is a MB or BMW want to be. The Gensiss is a good start, Hyundai need to continue with the luxury brand comittment. One day people will take a Luxury Hyundai sedan seriously.

Its entirely possible Hyundai is fine not having a luxury brand. That would cost BILLIONS and take YEARS to develop and implement. The Genesis is selling fine to those where "badge" is not important.

One other difference is the LS and lexus at the time SHOCKED THE WORLD whereas the Genesis is kind of a re-run of Lexus at the time.

Its possible maybe Hyundai's marketing team decided the world is not ready for a Korean luxury brand. I have no idea.

[1SICKLEX]

Let me also add, having a "BADGE" does not equal instant success. Infinit struggled until the latest gen M35/45 and the Q45 got discontinued and failed for nearly 20 years. They just debuted a nicely done EX35 they can't give away. Acura is basically a brand for Civic owners to move up to. Volvo is an afterthought. So is Saab. Lincoln also suffers and it has the "badge".

No better example than Audi, clearly a top rate premium brand that continues to struggle in America, even with more products, more aggresive marketing etc.

Look at poor Jaguar, they could not GIVe away the X-type.

True there are different reasons for all their failures, but the fact is that a luxury BADGE does not mean whatever you decide to sell, will sell or be loved/adored by the public.

I've said it before, America= Benz/BMW/Lexus and then there is everyone else from a badge perspective. I think Hyundai figured that out and doesn't want to invest money in something that wouldn't sell much more than what the Genesis sells now.

[rdgdawg]

Originally Posted by 1SICKLEX

[...
I've said it before, America= Benz/BMW/Lexus and then there is everyone else from a badge perspective. I think Hyundai figured that out and doesn't want to invest money in something that wouldn't sell much more than what the Genesis sells now.

And from a viable business standpoint, that is a very wise decision...

[speedflex]

I have been trying to figure out where Hyundai's business strategy is headed with the Genesis cars and so far it just doesn't fit with the existing models of what others have done which is to spin off higher end cars into a premium division. If they do bring the Equus over to the states will it be a Hyundai or will it be the flagship of a new luxury arm?

One possibility is that Hyundai wants to become something that really doesn't exist in this market... an elevated brand which sells all these cars under one brand which features premium products from top to bottom, effectively making their small and midsize cars and CUVs high end mainstream products. In other words, it puts Hyundai on a higher plane than just about any other mainstream car brand since they would also have to elevate their showrooms, service and sales departments to match that level of customer experience. I'm just theorizing, of course, but it is an option and it would be something noone has done before.

[1SICKLEX]

Originally Posted by speedflex

I have been trying to figure out where Hyundai's business strategy is headed with the Genesis cars and so far it just doesn't fit with the existing models of what others have done which is to spin off higher end cars into a premium division. If they do bring the Equus over to the states will it be a Hyundai or will it be the flagship of a new luxury arm?

One possibility is that Hyundai wants to become something that really doesn't exist in this market... an elevated brand which sells all these cars under one brand which features premium products from top to bottom, effectively making their small and midsize cars and CUVs high end mainstream products. In other words, it puts Hyundai on a higher plane than just about any other mainstream car brand since they would also have to elevate their showrooms, service and sales departments to match that level of customer experience. I'm just theorizing, of course, but it is an option and it would be something noone has done before.

Good point. Hyundai would then do what VW wanted to do but couldn't here; move upmarket successfully. VW covers from the cheap Polo (we don't get) to the Phaeton (we no longer get) and Tourag (which no one buys). The Passt W8 sadly sold poorly at its 40k asking price.

My other thought is maybe "Genesis" will eventually be the name of the brand they spin off and they will then call things "the Genesis X350" yadda yadda.....

[The G Man]

The genesis is a test car for Hyandai in the US luxury market, if it does well, maybe another up scale Hyundai after that, then its all go for the Hyundai luxury branch. Its the natural next step for Hyundai.