Tom2006

Looking for opinions on Hyundai's potential success in developing a luxury brand.

Can Hyundai pull it off and what is needed for Hyundai to be successful in this segment.

LexFather

Hyundai needs to continue to focus on Hyundai before investing in a luxury marque. They still are seen as a value driven brand, even with some really good/improved products.

The luxury segment is packed as it is between Tier III, II and I brands and vehicles selling in the luxury segment but without the luxury badge.

I honestly don't think Hyundai can bring anything different except somehow undercutting Acura as the new value brand.

PhilipMSPT

iTrader: (5)

Hyundai still needs to have an identity in the U.S.

Without it, it will only be "a sub-expensive Hyundai."

And it's not all about the money. It needs true luxury amenities, high technology, and evolutionary design: all of which Hyundai is not known for creating, but rather copying from other automakers...

rominl

iTrader: (4)

acura isn't fully ready yet, i don't think hyundai is. they should focus more on hyundai first to build it up more before thinking further

DASHOCKER

iTrader: (2)

Hyandai has sure come a long way. They have finally arrived imo. I believe they are ready for a luxury division. Toyota and Nissan did it, so why not Hyandai?? They need to go head strong, and not flake out like Mazda did their dead on arrival Amanti luxury divison.

LetMeShowU

I disagree. I think separating their upcoming luxury vehicles from the "Hyundai" name is a good thing. You yourself and many others have always stated that luxury customers require a luxury name - why would anyone want to spend 35k on a "Hyundai" when they can spend 35k on a Lexus, right?

Division separation is critical here. I know Hyundai is planning on putting out the Genesis & Equus models very soon. Personally, I think both should be branded with a new luxury badge as to distinguish themselves with other lower class models sold by Hyundai (Accent, Elantra, etc). Afterall, luxury buyers should have luxury class treatment, no?

I think the time is right for Hyundai to take the plunge into the luxury market. They have the models and the finances to support such a division and I think they should do it.

LexFather

Yes I agree they need an entire name change but thats just the smallest coin in the box. We see currently other tier II luxury brands struggle with image and perception as well as hitting a sales ceiling. Hyundai in America is struggling right now. The Korean currency is struggling now. They are improving their products but look at advertisements, they simply target established brands/cars and offer "we offer a value". This does NOT work in the luxury market. Value can get sales but should not be the basis for a luxury marque.

CLearly this new "brand" would be value oriented like Hyundai is.They never can shake totally their image, even Lexus, Infiniti, Acura have image issues by those who simply will not regard a Japanese luxury brand.

Now on the flipside, if they can establish what they want to be, to truly not be just a value but just as good if not better than current luxury marques and offering more for the money, they might just blow past some current competitors.
The Genesis sedan (and maybe coupe) sound incredible for the money, maybe under 30k to start, maybe about 38k loaded. You get RWD, a V-8 and luxury appointments.
There is no RWD V-8 in this price range outside the 300C and upcoming Pontiac G8 and none from an import. This car could be a segment buster.

So they could possibly make a V-10, RWD/AWD car for 50k? No one else could touch it for the price.

Once they really go above and beyond with interiors, styling, etc, they could be serious.
Well money was the issue. It costs billions to start a new luxury division and it would take all their best people to build a true luxury brand that truly is upgraded from Hyundai.

We mostly will agree their products are not better than Honda/Toyota now. They need to really get past that hurdle first then move on to maybe a luxury division.


I am not saying they cannot do it (not how people in 1989 said the Japanese could not do it) but they really really really need to have a focused path and make super best in class products to succeed.

Oh and about 10 billion dollars cash

LetMeShowU

See, the problem I see with them keeping these higher end cars under the "Hyundai" name is exactly the problem you describe. Hyundai is perceived by the American public as a "value brand" alternative to Toyota, Honda, & Nissan.

From all that we have heard in the past several months, it seems Hyundai essentially at this point has 3 upscale models that they will be offering in the near future - the Genesis sedan, the coupe, & the Equus sedan. To brand these models as "Hyundai" would be a huge mistake in my opinion. We know Hyundai is building them. They WILL be made available to the public in the near future. So my question is, would it be better for them to keep them under the "value branded Hyundai" nameplate or a new upscale nameplate which has no defining identity as of yet??

In my opinion, they would be better off offering these new models under a completely new marque, thus removing any negative stigma attached to the "Hyundai" nameplate. Honestly, if what you say comes true and they offer a fully loaded Genesis sedan for 38k, why on Earth would any luxury buyer purchase it over a Lexus ES/GS, Infiniti M, or even an Acura RL? Granted, it may have similar features, better price, etc. But will that be enough to sway a potential buyer within this price point into buying a 38 thousand dollar "Hyundai"? IMO, no, in which case these cars may seriously flop as a result (despite their merits).

Toyota doesn't sell upscale sedans (although I personally think they could get away with it). Nissan doesn't do it. Honda doesn't do it. There's a reason why these every day brands do not sell luxury cars, which is why they created their luxury divisions. It's all in the name. Hyundai needs to establish a luxury name for themselves if they want to compete in this category.

Regardless of whether this new brand markets itself as a value alternative to other luxury marques, it will still separate itself from all other Hyundai models and history. They can't be all things to all people and using the Hyundai name to sell models competing with MB, Lexus, BMW, etc, would be ridiculous and won't work.

I say they should take the plunge and do it right or don't do it at all.

Tom2006

Why would they have to exceed Toyota/Honda quality? Many will tell you they equal, or are very close to equal, of these two companies. And this is ignoring Toyota's recent quality issues.

Tom2006

You are spot on and in agreement with most Hyundai dealers. The majortity believe a seperate brand is required for the same reasons Toyota created Lexus. The Lexus models would not have succeed as a Toyota. Plus seperate brand have increased vehicle profit margins.

PhilipMSPT

iTrader: (5)

If someone says the Quality of Hyundai is the same or superior, then they are missing the point of Luxury.

Part of Luxury is the attention to detail, and the use of quality materials. Not only does Hyundai use cheaper materials with not-so-perfect detailing, they are copying Luxury ideas from other brands, rather than making it unique. When has Hyundai ever been innovative?

Look at the Veracruz for example; it's a blatent attempt to copy the RX350 with cheaper materials and not-so-perfect detailing. Motor Trend commended it for being a better value, but it isn't a luxury marque, but rather an RX knock-off.

If I want a Louis Vuitton, I would get the real thing. The knock-off may be cheaper, but that wouldn't be luxurious...

LetMeShowU

Exactly. IMO, they should do what Toyota did with Scion. Create an extension from the Hyundai showrooms to the more upscale division. By doing this, they would be able to keep the new line of cars close, while still keeping them, their salespeople, and their clients separate from the every day "Hyundai" buyer. It would help keep costs down by not having to create entirely new dealerships across the country to support the new line. If in time, the division proves to be a success, then they can start separating themselves even further from "Hyundai" by building entirely new dealerships devoted exclusively to the brand. But they have to start somewhere. Perhaps investing so much so soon is not a wise decision. But being too conservative and selling these new upscale models along side the Accent & Sonata would be a huge mistake for them, IMO.

Tom2006

You refernced Honda and Toyota in your original post and now refer to luxury brands. Did you mean Lexus and Acura? If yes, then Hyundai has not yet attained that level. I'm not so sure the Veracruz is clone of the RX. Their is a limit to what a designer can do with an SUV that standsout from the crowd.

BTW, for the longest time the LS was no more than a clone of the MB S Class, and Lexus did well with it.

Tom2006

You need stand alone dealers similar to what toyota did with Lexus. If they are in seperate showrooms (like SDcion) they will still be asocaited as a Hyundai.

LetMeShowU

True, there will be association between the two, but there's going to be association between them regardless. Hyundai is not nearly as established as Toyota was when they created the Lexus line or when Nissan created the Infiniti line. IMO, they cannot afford to take such a huge risk at this time on building stand alone dealers ala Lexus/Infiniti. It's too soon. It may work for them, but the risk is too great for them to chance it, IMO.

If they can establish this brand along side Hyundai, but still separate the showrooms between the two divisions, it will at least show some distinction there. It would be a much better idea than putting all these different priced models together under the same "Hyundai" roof.