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

[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.

[speedflex]

I think image has a lot to do with that. It does look bad for your boss to be rollin in his car which is worth more than most of his staff's annual salaries at a time when layoffs are a real likelihood. In other words, it's not the time to look too successful. Just ask the bird-brained Detroit CEOs who flew to Washington in their company jets only to get spanked by legislators for being excessive and irresponsible.

[Brian231]

Originally Posted by speedflex

I think image has a lot to do with that. It does look bad for your boss to be rollin in his car which is worth more than most of his staff's annual salaries at a time when layoffs are a real likelihood. In other words, it's not the time to look too successful. Just ask the bird-brained Detroit CEOs who flew to Washington in their company jets only to get spanked by legislators for being excessive and irresponsible.

Very true, image concerns are important now with companies and CEO's. Great comparison with the Detroit automaker CEO's.

[Hoovey2411]

Its a very nice car. I've been seeing increasing numbers of them on the road lately

[rominl]

i think it's a very nice car, totally worth the money and more! really kind of like lexus back in 1989. and hey, now lexus is up there

[1SICKLEX]

Well I don't think its mass people that are into image dumping their cars, just some. I think for those people that were not into badges in the first place see the Genesis for the car it is. Again, the article can be misleading b/c we do not know exactly the makeup of cars being traded in or cross-shopped.

For instance, its not like luxury brands have stopped selling. I would bet there is a shift in colors, more to blacks, silvers, dark hues and a move away from chrome wheels, bling etc.

The Genesis is selling in clips of about 1,000 a month-1,500 a month and I believe sales goals were 25k or so.

[RON430]

Originally Posted by 1SICKLEX

Well I don't think its mass people that are into image dumping their cars, just some. I think for those people that were not into badges in the first place see the Genesis for the car it is. Again, the article can be misleading b/c we do not know exactly the makeup of cars being traded in or cross-shopped.

For instance, its not like luxury brands have stopped selling. I would bet there is a shift in colors, more to blacks, silvers, dark hues and a move away from chrome wheels, bling etc.

The Genesis is selling in clips of about 1,000 a month-1,500 a month and I believe sales goals were 25k or so.

I think this really is the essential point. I haven't been in a Genesis yet but I have seen quite a few. There are a lot of people that want some size and feel in the appointments and they are either not into badges or don't feel that there is enough value in many badges to justify the premium. Without trying to flame anyone, it really is the Lexus story repeating if you ask me. It may not be as successful but if you offer a good product at a good price, you get sales. Don't know how many serious S class shoppers are hopping into a Genesis but there don't seem to be that many serious S class shoppers anyway.

[TwiBlueG35]

I wonder how many of these Genesis owners would keep their cars in a few years and how many would replace it with another Hyundai. By the way, why do the sedan and coupe share the same name? You don't see any other coupe/sedan combo from the other automakers look so different from each other. Accord, Civic, 3-series, G37, Altima, Cobalt, Yaris, all of these share most of their design between coupe and sedan. Is Genesis a brand or a single model?

[mmarshall]

Originally Posted by speedflex

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.

It was not just the Genesis which took Hyundai out of the "entry-level" category. Those days have been gone for years. The XG300/350, Azera, and Veracruz all played significant roles as well. The Genesis is simply another layer of icing on an already well-iced cake.

Hyundai has also hugely risen in the quality of their vehicles as well as pricing and relative position in the auto market. At one time, Hyundai built some of the worst vehicles in the marketplace. Now, they rank among the best, especially for the money, although the latest Sonata and Genesis Coupe (not the sedan) show some signs of a slight cheapening of interior materials (like some other automakers).

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.

That is probably correct. I test-drove an Excel myself, in 1987, and while not quite as poorly-built as the 1984 Pontiac Fiero (the Fiero was simply awful...the most poorly-built new car I've ever test-driven), the first Excels in the 1980s were true slugs in the power department. When I turned the A/C on (it was a hot summer day), it felt slower than even the notoriously doggy 1.8L Cadillac Cimarrron, which was like molasses. I would consider the first Excels and Cimarrons risky in fast-moving traffic. The Excel, BTW, was not a Hyundai design. It, and the 2-door Scoupe (remember the Scoupe, Mike, ), were a rebadged Mitsubishi Precis. Hyundai, in the American market, did not even sell their own engines until well into the 1990's....they used Mitsubishi powerplants.

(Mike....I WILL say one thing for the Scoupe. A heavily modified version won the famous Pikes' Peak Hill Climb, which took some doing. So did a version of one of my favorite Toyotas (which I once owned)...the beautiful 1994-99 Celica with the four round headlights).

[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.