In the end everyone wants overpriced cars?

[Junkie49]

I want to discuss about how reviews and comments from people made me think either they are very cheap (wants more, then some more for lower price), or willing to pay more for small additions.

Quite a lot of you can agree base BMW or Audi, Lexus is quite practical in price. Maybe a bit expensive since there is not much of luxury or tech in the vehicle. However as soon as you build them with options, everything you add goes by the thousands. Difference in base to loaded price can go over 10k easily.

If you look at Genesis, 3.8 does indeed require packages to be fully loaded. It goes near 9k. V8 all comes in standard for only 1-2k and add another 2k for R-spec. And V8 is what they really stand-out from the rest of the luxury brands. V6 is very strong pricewise compared to other luxury brands. Move on to V8 then it is absolutely no brainer.

Now lets check all the features on Genesis to other brands dollar to dollar per option to option. This is where Genesis beats them up. I tried to build MB C-class luxury (smaller cabin, weaker engine. Not a full apples to apples comparison) with similar options available (that was all they offered) and came up with 10k+ totalling $48,355 MSRP for v6 228 HP engine. FYI, Genesis 3.8 loaded costs $43,850 MSRP. But everyone knows you can easily take off $2k from that price even if you start dealing from MSRP. Not sure of MB's promotion to compare.

BMW is very similar. I had to downsize to 328i (small cabin, weaker engine also) options to hopefully match Genesis and came up to be $49,700 MSRP.

Fun facts: adaptive cruise control option in BMW costs $2400 and will have to wait longer due to special option

MB and BMW do give something to the table such as,
-MB gives you split folding rear seat, headlamp washing system, in-dash memory card reader and 6GB hard drive.
-BMW gives retractable headlight washers, fold down rear seats, heated wheels.
is that worth thousands more with smaller cabin and weaker engine not considering what Genesis brings to the table?

I created previously another thread to see other people's thoughts on 4.6's competition and thankfully JckOfSpds commented
1) BMW 5-series
2) Mercedes E-class
3) Acura TL
4) Lexus GS or LS
5) Infinity M

All of them are 10k+ above the price of Genesis and I had to try building BMW 535i that came out to be $73,775 give or take to match the Genesis 4.6. Granted I had to add more packages that eventually came with more features that Genesis lacks (cooled passenger seat, Active blind spot detection etc.), it is still too expensive for the same if not better features.

Granted you may find it frustrating that Genesis lacks few additional features but Hyundai are selling them for cheap with different reason. They know that if they deliver like what BMW 535i did, they have to raise prices up. Nobody wanted to buy Phaeton from VW which went around 60k+ when it launched. Hyundai learned from what VW failed and instead did the opposite. They offered luxurious features that most of people will be satisfied and put 10k lower price tag on it. This is currently a Win-Win for both consumers and Hyundai and it is really sad some people really doesn't get out of their closet in determining their next vehicle as well as picky consumers not even considering this because of some lacking features.

P.S. Sorry for the long texts but I had to vent somewhere

 

[newman]

I want to discuss about how reviews and comments from people made me think either they are very cheap (wants more, then some more for lower price), or willing to pay more for small additions.

...

P.S. Sorry for the long texts but I had to vent somewhere

Lots to talk about here.. good thread to start.

I contend that within 3-5 years BMW/MB will drop in price and Hyundai will raise theirs such that the gap narrows considerably. And at that time many more people will not be calling Hyundai the value alternative but simply a competitor of these fine marques.

And this is the way free markets are supposed to work. And then some of us may well start looking for the up and coming Vietnamese or Slovakian auto manufacturer!

Cheers,
Newman

 

[Glashub]

There's a reason that every car manufacturer selling cars in North America since almost the beginning of auto history creates a separate luxury brand. People with money are not value driven and expect end to end platinum treatment. Hence the abundance of MB E350's and E450's in LA.

People just won't buy a Caddy if its called a Chevy and serviced next to an Aveo.

Having been around money most of my life (but not really having any) I can tell you that they think differently. They will squeeze every penny from you but go buy an MB.

Also, BMW is very smart....people can get into a lease for a Bimmer for less than an Acura and maybe less than a Genesis.

 

[tonygxp]

There's a reason that every car manufacturer selling cars in North America since almost the beginning of auto history creates a separate luxury brand. People with money are not value driven and expect end to end platinum treatment. Hence the abundance of MB E350's and E450's in LA.

People just won't buy a Caddy if its called a Chevy and serviced next to an Aveo.

Having been around money most of my life (but not really having any) I can tell you that they think differently. They will squeeze every penny from you but go buy an MB.

Also, BMW is very smart....people can get into a lease for a Bimmer for less than an Acura and maybe less than a Genesis.

here in the tristate area (NY/NJ/PA) it's the same way.. more MB's, BMW's, Lexus', etc than you can shake a stick at.. cars, SUV's you name it. and i'm not even talking about Escalade's and Denali's.. We are the "fancypants" people lol.. i do wish they made the genesis and the Equus part of a luxury brand but it is what it is i guess?

 

[SeismicGuy]

Maybe tangentially on topic here but my wife and I found it interesting that the two largest construction projects here (in the San Fernando Valley area of Los Angeles) are the expansion of the 2 local Mercedes dealers. One dealer is adding to their already over-the-top showroom and the other is building a huge brand new mega-facility that will have hundreds of cars (right across the street from the Hyundai dealer that left the lousy impression).

What we find amusing is that Mercedes and higher-end products are booming in this stinking economy.


Doug

 

[acoga]

Lots to talk about here.. good thread to start.

I contend that within 3-5 years BMW/MB will drop in price and Hyundai will raise theirs such that the gap narrows considerably.

I'd take that bet. Part of why people buy luxury brands is conspicuous consumption; they're signaling that they're the kind of person who drives a $75K car. M-B is under very little price pressure. Just look at high end watch brands. You can buy a Citizen for $30 that keeps better time than a $10K Patek Philippe, but guess which one gets worn in the boardroom?

 

[acoga]

What we find amusing is that Mercedes and higher-end products are booming in this stinking economy.

That's because it's not stinking for everyone. Corporate profits are way up. CEOs are taking him more money than ever. The income and wealth gap between the top 1% and the bottom 99% is wider than it's been since the Great Depression.

It's a very good time to be selling luxury goods. Business is booming at the high end.

 

[Mark_888]

I'd take that bet. Part of why people buy luxury brands is conspicuous consumption; they're signaling that they're the kind of person who drives a $75K car. M-B is under very little price pressure. Just look at high end watch brands. You can buy a Citizen for $30 that keeps better time than a $10K Patek Philippe, but guess which one gets worn in the boardroom?

There may be a lot of $10K Patek Philippes owned by hollywood types, athlete superstars, socialites, etc, but I would bet that most CEO's wear a fairly modest watch these days. For high tech companies (including billionaire owners of companies like MS, Google, Facebook, etc) the CEO's probably wear $100 watches (or don't even wear a watch).

I disagree that MB is not under price pressure. Maybe not for the S Class, but for E class (not to mention C class), these are sold to people who are typcially not wealthy and who are cutting back these days.

 

[Glashub]

There may be a lot of $10K Patek Philippes owned by hollywood types, athlete superstars, socialites, etc, but I would bet that most CEO's wear a fairly modest watch these days. For high tech companies (including billionaire owners of companies like MS, Google, Facebook, etc) the CEO's probably wear $100 watches (or don't even wear a watch).

I disagree that MB is not under price pressure. Maybe not for the S Class, but for E class (not to mention C class), these are sold to people who are typcially not wealthy and who are cutting back these days.

Zuckerberg drives an old Acura and lived in the same apartment until recently. Same with Biz Stone and others with social media/flash sales/coupon offer companies.

They are anti-flash and want to use their money to invest in ideas that will make the net and life better. At least for now. That could change when youthful idealisim falls away.

We are watching the splitting our society and economy. Those tied to the industrial age are experiencing a depression. Those tied to the information age are doing as well, almost as well or better than ever.

Hollywood will always be producing millionaires.

 

[newman]

I'd take that bet. Part of why people buy luxury brands is conspicuous consumption; they're signaling that they're the kind of person who drives a $75K car. M-B is under very little price pressure. Just look at high end watch brands. You can buy a Citizen for $30 that keeps better time than a $10K Patek Philippe, but guess which one gets worn in the boardroom?

You do have a valid point of course. As does mark 888. So perhaps to refine the argument: MB and BMW will have price pressure on the mid to low end while Hyundai will enjoy price appreciation on their mid to luxury brands.

Cheers
Newman

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