Hyundai rules out separate premium brand
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Hyundai rules out separate premium brand
As myself and others predicted. Its no cakewalk to start a luxury brand and sales show they are far from a hit, far from how Acura and Lexus were initially received 25 and 20 years ago. Who knows maybe 50 years from now but not today.
http://www.autonews.com/apps/pbcs.dl...110409996/1280
http://www.autonews.com/apps/pbcs.dl...110409996/1280
By HANS GREIMEL, AUTOMOTIVE NEWS on 4/01/2011
Hyundai Motor Co. has ruled out spinning off the Genesis or Equus nameplates to create an independent premium brand along the lines of Lexus or Infiniti, partly because of the enormous cost involved and possible image damage to sibling nameplates.
"There are no plans for Hyundai to make a separate brand," Vice Chairman Shin Jong-Woon said in an interview Friday at the carmaker's headquarters in Seoul, South Korea.
Shin didn't elaborate on Hyundai's decision to keep the top-tier Genesis and Equus nameplates in the Hyundai family. But his comments counter speculation in recent months that South Korea's biggest automaker would follow Japanese rivals in creating an upscale line.
Hyundai considered such a move but ultimately decided against it, spokesman Frank Ahrens said. Executives worried it would cost too much and undermine the image of other models at a time when Hyundai is trying to position the entire lineup as "modern premium."
"It's expensive. Dealerships, marketing, all those things. You don't just spin it off at no cost," Ahrens said.
"Secondly, you've heard us talk a great deal about trying to raise the brand perception. And that's perception for all the vehicles. So how would it help the brands if we were to cut off our top level? We are hoping they will help lift the whole brand."
Hyundai has made rapid advances in quality in recent years. But executives say there is a big gap between their vehicles' actual and perceived quality. Lifting the perception is a top priority.
A more realistic--and cost-effective--alternative to building a new brand would be simply fleshing out Hyundai's upper range with additional models and variants, Ahrens said.
Shin declined to say whether Hyundai might resurrect the idea of a new brand in the future.
Carving out luxury lines from existing brands has met mixed success.
Toyota Motor Corp. scored big by rolling out the Lexus brand in 1989. It is now the best-selling premium brand in the United States, outpacing both Mercedes and BMW. But Honda's Acura brand, the first of the Japanese spinoffs in the United States, has had trouble gaining traction.
Sales of the Korea-built Genesis were up 23 percent to 4,224 units in the year through February. The Equus, Hyundai's highest priced entry, was launched last fall in the United States.
It sold 487 units in the first two months.
Hyundai Motor Co. has ruled out spinning off the Genesis or Equus nameplates to create an independent premium brand along the lines of Lexus or Infiniti, partly because of the enormous cost involved and possible image damage to sibling nameplates.
"There are no plans for Hyundai to make a separate brand," Vice Chairman Shin Jong-Woon said in an interview Friday at the carmaker's headquarters in Seoul, South Korea.
Shin didn't elaborate on Hyundai's decision to keep the top-tier Genesis and Equus nameplates in the Hyundai family. But his comments counter speculation in recent months that South Korea's biggest automaker would follow Japanese rivals in creating an upscale line.
Hyundai considered such a move but ultimately decided against it, spokesman Frank Ahrens said. Executives worried it would cost too much and undermine the image of other models at a time when Hyundai is trying to position the entire lineup as "modern premium."
"It's expensive. Dealerships, marketing, all those things. You don't just spin it off at no cost," Ahrens said.
"Secondly, you've heard us talk a great deal about trying to raise the brand perception. And that's perception for all the vehicles. So how would it help the brands if we were to cut off our top level? We are hoping they will help lift the whole brand."
Hyundai has made rapid advances in quality in recent years. But executives say there is a big gap between their vehicles' actual and perceived quality. Lifting the perception is a top priority.
A more realistic--and cost-effective--alternative to building a new brand would be simply fleshing out Hyundai's upper range with additional models and variants, Ahrens said.
Shin declined to say whether Hyundai might resurrect the idea of a new brand in the future.
Carving out luxury lines from existing brands has met mixed success.
Toyota Motor Corp. scored big by rolling out the Lexus brand in 1989. It is now the best-selling premium brand in the United States, outpacing both Mercedes and BMW. But Honda's Acura brand, the first of the Japanese spinoffs in the United States, has had trouble gaining traction.
Sales of the Korea-built Genesis were up 23 percent to 4,224 units in the year through February. The Equus, Hyundai's highest priced entry, was launched last fall in the United States.
It sold 487 units in the first two months.
Lead Lap
Joined: May 2011
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From: CA
Anybody else think of the Genesis or Equus as Hyundai's Cressida? Basically a nice *** luxury car being sold at a non-luxury brand? Then discontinued after awhile when the parent company established a luxury brand? I see these cars following the path of the Cressida.
i think hyundai and it's other brand kia will be just fine, stratifying and further defining their models. right now it's still quite confused, with kia sometimes getting the better models and hyundai sometimes. my best guess about 'definining' them is kia is more aimed at younger buyers, and hyundai at older ??
Lexus Fanatic
Joined: Oct 2003
Posts: 94,226
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From: Virginia/D.C. suburbs
There are some legitimate arguments, of course, for Hyundai not doing a separate, upmarket, division. But, if they want to sell the Equus in the U.S., I think it would get more attention if it were marketed under a premium name. It is doubtful, for instance, if the original 1986 Acura Legend or 1990 Lexus LS400 would have been the hits they were if they had been marketed as a Honda or Toyota. Mazda tried selling the flagship Millenia under its own name when Ford killed Mazda's upmarket Amati division, and the car ended up a flop....the Millenia had originally been designed to sell as as an Amati. VW also tried with the Phaeton, with similiar results.
Of course, a separate upmarket-division is no guarantee that you will be able to sell a big flagship either, as Infiniti's Q45 proved.
I recently reviewed an Equus, BTW, and I was quite impressed with it overall, though it didn't quite reach the LS460's tomb-like levels of silent-running, and the choice of only four paint-colors was, IMO, an insult for a 60K car.
Of course, a separate upmarket-division is no guarantee that you will be able to sell a big flagship either, as Infiniti's Q45 proved.
I recently reviewed an Equus, BTW, and I was quite impressed with it overall, though it didn't quite reach the LS460's tomb-like levels of silent-running, and the choice of only four paint-colors was, IMO, an insult for a 60K car.
Last edited by mmarshall; May 5, 2011 at 07:49 PM.
Trending Topics
"Toyota Motor Corp. scored big by rolling out the Lexus brand in 1989. It is now the best-selling premium brand in the United States, outpacing both Mercedes and BMW. But Honda's Acura brand, the first of the Japanese spinoffs in the United States, has had trouble gaining traction."
I see big things on the horizon for Infiniti.
Last edited by Hoovey689; May 5, 2011 at 08:51 PM.
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Yeah, Acura specifically stated they're not trying to compete with upper luxury brands like BMW and Mercedes though. Not a bad idea though, seeing that market is flooded with cars. Hyundai is doing what Acura needed to do: take over that segment of the market between standard cars (eg, Toyota) and luxury cars (eg, Lexus). Acura's finally starting to make a move with their SH-AWD. I was getting sick of seeing 40k FWD cars with no other option.
Yeah, Acura specifically stated they're not trying to compete with upper luxury brands like BMW and Mercedes though. Not a bad idea though, seeing that market is flooded with cars. Hyundai is doing what Acura needed to do: take over that segment of the market between standard cars (eg, Toyota) and luxury cars (eg, Lexus). Acura's finally starting to make a move with their SH-AWD. I was getting sick of seeing 40k FWD cars with no other option.
Lexus Champion
Joined: Jun 2008
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From: Alberta
The Genesis and Equus are very "nice" cars for what they are. You could argue that they compete on many levels with Lexus. Are you suggesting that the Cressida should have been badged a Lexus? The Genesis and Equus are head and shoulders above anything else in their line up, but when you actually see them in person, it is obvious that they're not quite there....yet.
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SMH Its new news b/c this if the first and only time they have said what the plan is. Until this point people just speculated if they were going to spin off a luxury brand or not. Well now we know its not going to happen. There was no thread on it here and its just a month old. 
Ya, ummm...no.
The Genesis and Equus are very "nice" cars for what they are. You could argue that they compete on many levels with Lexus. Are you suggesting that the Cressida should have been badged a Lexus? The Genesis and Equus are head and shoulders above anything else in their line up, but when you actually see them in person, it is obvious that they're not quite there....yet.
The Genesis and Equus are very "nice" cars for what they are. You could argue that they compete on many levels with Lexus. Are you suggesting that the Cressida should have been badged a Lexus? The Genesis and Equus are head and shoulders above anything else in their line up, but when you actually see them in person, it is obvious that they're not quite there....yet.
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