Hyundai brand reputation

[BigTrace]

Yes I'm a noob here too, trying to learn more about this car. So far, I can't find too much on it that ISN'T good. Every article I read, post on a forum, just about everyone has something positive to say about this car. So, I went and test drove both a V6 and a V8 today.

The question at hand is "it's still a Hyundai" as this thread has enumerated many times. I am asking myself, "am I going to spend $40k on a Hyundai?" I have the ability to buy any Lexus, any Mercedes or BMW for that matter, so what am I doing here??

I think the astute researchers does his homework before buying anything. I especially do my homework. Many posters said the same thing "look at LG or Samsung" and while that's true, taking a flyer on a $2k TV or refrigerator is a whole lot different than taking a flyer on a $40k car. That being said, I think Hyundai has built an incredible machine worthy of all the hype it has received. What I told the dealer is this:

- Rebadge the car when you get it in. Get rid of the "H" symbol on the trunk and the wheel inserts in favor of the winged Genesis badge.

- Physically create a special place at the Hyundai showroom JUST FOR Genesis owners. Similar to fleet sales, just more flashy, nicer waiting rooms, free coffee, donuts, whatever, flat panel TV's and a ONE ON ONE EXPERIENCE WITH A SERVICE MANAGER !! and KNOWLEDGEABLE SALESMEN WHO KNOW THE VEHICLE INSIDE AND OUT then refer ALL people wanting or looking at a Genesis to those people only. The other salesmen should be forbidden to even sell the car, much less mention its name.

- Give out a Genesis LOANER when one is brought in. No Exceptions

- Get email and contact info for every owner and send emails about specials and "Genesis Owner Only" events. Keep customers up to date and involved.

- If at all possible, match Mercedes and BMW's all inclusive maintenance programs (this would have to come from Hyundai itself).

I can think of more, but since this is my first post and I'm not an owner yet, I thought I'd throw this out as food for thought.

 

[sandy]

Big Trace -

If you really believe what you said, " I think Hyundai has built an incredible machine worthy of all the hype it has received."...why are you asking your self "am I going to spend $40k on a Hyundai?" I think the answer depends on the value you place on owning a "prestige brand". My experience in test driving the Genesis, as well as the GS, M35 and STS, is that the Genesis is the most enjoyable (for me) to drive, has a fit and finish equal to the others as well as features like the Lexicon sound system the others don't have. It also has a big H on the rear deck. If this takes away form your enjoying the total experience of owning a car, forget the Genesis and buy the brand that makes you feel good. Brand psychology often defies logic. I'm sure Buick makes a great car but I would never own one. I'm old and it would make me feel even older. For my part, owning a "Hyundai" will be part of the fun and I can't wait for the reaction of my country club friends. I'm picking mine up November 25th.

 

[BigTrace]

Big Trace -

If you really believe what you said, " I think Hyundai has built an incredible machine worthy of all the hype it has received."...why are you asking your self "am I going to spend $40k on a Hyundai?" I think the answer depends on the value you place on owning a "prestige brand". My experience in test driving the Genesis, as well as the GS, M35 and STS, is that the Genesis is the most enjoyable (for me) to drive, has a fit and finish equal to the others as well as features like the Lexicon sound system the others don't have. It also has a big H on the rear deck. If this takes away form your enjoying the total experience of owning a car, forget the Genesis and buy the brand that makes you feel good. Brand psychology often defies logic. I'm sure Buick makes a great car but I would never own one. I'm old and it would make me feel even older. For my part, owning a "Hyundai" will be part of the fun and I can't wait for the reaction of my country club friends. I'm picking mine up November 25th.

Sandy,

I think that is the purpose of this forum, to discuss brand reputation and what it means to this car. As far as the car is concerned, dollar for dollar, it is one of the best cars I've driven.... for the money. Sure there are better cars to drive... my wife corvette comes to mind, but it is also not the same type of car.

The bigger issue is what will this cars cost of ownership be in 3, 4 or 5 years when most people get rid of their cars. Hard thing to estimate given the fact that Hyundai has the reputation it has. Is it coming around? Yes, but if Hyundai continues to deliver this car in a way that doesn't differentiate the car from all of the other Hyundais, they will always have a brand imaging problem.

Having owned Mercedes, Infiniti's and others, I would like to sell the thing someday for something more than a song. If that's not going to happen, then I need to price that into the deal so I don't take a huge hit in the end. Long story short, I am one of those guys that Hyundai is trying to convert. The question is, what does Hyundai have to do to convert me? That was the point of my post.

 

[sandy]

Big Trace - I totally agree with your concern about re-sale value and the part that plays in determining a reasonable purchase price. On a new car like the Genesis it is very difficult to forecast what the resale value will be. That's why you might want to consider Hyundai's lease deal (which I took advantage of). It's only 24 months...so you're not locked in for too long if you wind up not loving the car. There is virtually NO interest being charged (two-tenths of 1%). At lease end you just walk away, no need to worry about resale value. Or, if you want to keep the car, you have the option to buy it at lease end and will have had an interest free loan for the first two years of ownership. Good way to hedge your bet.

 

[Stormy]

Big Trace - I totally agree with your concern about re-sale value and the part that plays in determining a reasonable purchase price. On a new car like the Genesis it is very difficult to forecast what the resale value will be. That's why you might want to consider Hyundai's lease deal (which I took advantage of). It's only 24 months...so you're not locked in for too long if you wind up not loving the car. There is virtually NO interest being charged (two-tenths of 1%). At lease end you just walk away, no need to worry about resale value. Or, if you want to keep the car, you have the option to buy it at lease end and will have had an interest free loan for the first two years of ownership. Good way to hedge your bet.

Good call Sandy. That's exactly what I did. The money rate on the lease special is 0.00001 percent, which is basically like an interest free loan for the first 2 years. If the Hyundai doesn't hold it's value, I'll just walk away. Otherwise, I might keep it or roll the equity into a small downpayment on my next Genesis.

BigTrace, while all of the luxury dealer amenities you mentioned are very nice, I think at some point you need to ask yourself a big question:

Would you rather have a $40,000 car and get service with the general public, paying out of your own pocket, dealing with an Elantra or Sonata loaner, eating stale Dunkin' Donuts and drinking free coffee if you choose to wait? (My Hyundai dealership is surprisingly nice, leather couches, plasma TV, free donuts and coffee, but no Genesis loaners)

-or-

Would you rather have a $60,000 car with all-inclusive maintenance, Genesis loaners, and a separate dealership?

The reality is that all of those extra perks cost you. Personally, I'd rather just drive the Sonata loaner the 3-4 days a year I actually need service and have the cheaper car.

I guess I'm just saying I like the $40K price the way it is now, and if the Genesis cost $60K I'd find it a little more difficult to justify choosing it over a BMW or Mercedes with better brand recognition.

 

[Sal Collaziano]

Welcome aboard, BigTrace. Thank you for signing up. I know where you're coming from.. I agree that the dealership experience needs to be improved upon. Hopefully they're learning this as they go along. They SAID things were going to be different for the Genesis - but so far, I haven't seen much. I haven't even seen a Genesis SIGN nor a Genesis vehicle standing out in front of the rest of the Hyundais at my local dealership..

 

[Wordman]

When I bought my V6 Tech three weeks ago from Douglas Hyundai in the Santa Ana Automall (Orange County, CA), they had at least four Genesises (Genesi?) prominently in front of the showroom.

Granted, there were a couple of rows of cars in from of the showroom, but they seemed to be showing them off.

 

[Gimli]

My perspective isn't that the Hyundai name will hurt the Genesis sales but rather the Genesis sales will improve the Hyundai name.

It's clear Hyundai isn't trying to flood the market with their Genesis so I would be very surprised if they had them on the lot for any extended period of time. What it will (and already is) doing though is making the car enthusiast press talk about Hyundai in a very positive, no holds barred terms.

Hyundai has been building an ok reputation for a few years with the Sonata, Azera, Tuscon and Santa Fe but the most I've ever seen journalists go in describing those vehicles was polite nudges at the Hyundai products, never going overboard with the compliments and always mentioning the dreadful past of the brand.. It seems to me they're falling over each other trying to promote the Genesis better than the last guy and that is incredibly valuable for Hyundai as a brand. It shows a shift in perception within the industry which will eventually reach the market they're looking for.

IMO it's a good move for Hyundai to market the Genesis under the Hyundai name in North America. They have a lot more to gain by raising the Hyundai brand image across the board than to preserve a few thousand Genesis sales. Once they do release their upscale brand (which I see them doing in 3-5 years) they'll still have a strong "everyday" brand to support the new endeavour.

 

[BigTrace]

My perspective isn't that the Hyundai name will hurt the Genesis sales but rather the Genesis sales will improve the Hyundai name.

It's clear Hyundai isn't trying to flood the market with their Genesis so I would be very surprised if they had them on the lot for any extended period of time. What it will (and already is) doing though is making the car enthusiast press talk about Hyundai in a very positive, no holds barred terms.

Hyundai has been building an ok reputation for a few years with the Sonata, Azera, Tuscon and Santa Fe but the most I've ever seen journalists go in describing those vehicles was polite nudges at the Hyundai products, never going overboard with the compliments and always mentioning the dreadful past of the brand.. It seems to me they're falling over each other trying to promote the Genesis better than the last guy and that is incredibly valuable for Hyundai as a brand. It shows a shift in perception within the industry which will eventually reach the market they're looking for.

IMO it's a good move for Hyundai to market the Genesis under the Hyundai name in North America. They have a lot more to gain by raising the Hyundai brand image across the board than to preserve a few thousand Genesis sales. Once they do release their upscale brand (which I see them doing in 3-5 years) they'll still have a strong "everyday" brand to support the new endeavour.

I do agree with this, but a good comparison IMO is Mitsubishi. Although they are one of the worlds leaders in manufacturing (as is Hyundai), have a great reputation in electronics (just like the Korean Samsung and LG), they will always have the same image ( car wise ) as Mitsubishi, basically a lower tier asian manufacturer. At least Mitsubishi had "Japanese" roots and could be at least mentioned in the same breath as Toyota and Honda, but Hyundai has to forge it's own course.

Remember, Mitsubishi came out with the "Diamante" several years ago as its "flagship" car. I bought a used one in 1997 (it was a 1995) for about 50% of the new price. I later got rid of the car in 2000 after owning it for just over a year and a half for about 2/3'ds of what I paid for an overall decrease of about 60% of new in almost 4 years. All in all, that was a pretty scary experience. The car was in perfect shape too, just not popular. Bottom line, the Diamante was dropped I think in 2005 and nothing has replaced it.

Mitsubishi has been in the US auto market longer than Hyundai and to this day, still has a "lesser than" reputation. Sure, the Genesis will make some people like me consider it due to its unique quality, its "bells and whistles" and its low price tag (in comparison) but for most people who are in this purchasing segment (8 out of 10 probably), they are looking for an "identity" or an extension of their personality. It's my opinion that the only way to achieve this is by segregating the Genesis AWAY from Hyundai itself or at the very least, create a completely different dealership experience for prospective Genesis owners as I've mentioned in my previous post above.

As for now, I am still on the fence. I'd like to see more of a price cut instead of my local dealer adding $3000 onto MSRP for a V-8. That's just plain stupid. In this economy, Hyundai should be GIVING these cars away to get them out there so that people can see it and talk about it. Worry about making money in the future. Create a whole new dealership experience for Genesis owners similar to what the other luxury makers do, then see where it goes from there. It will not only raise Hyundai's reputation across all their lines, but it will make them even more money in the future as future luxury lines can be added and some of their low cost lines can be dropped.

 

[Sal Collaziano]

In regards to the Mitsubishi, Mazda and Volkswagen attempts at luxury - and their failures - I don't see Hyundai falling into those same footsteps.. The Phaeton was simply too expensive. The Diamante and Millenia were nice, but that was all.. The Genesis is a different story. It's not missing anything. It's big, roomy, comfortable, technologically capable, it handles well and it's very powerful. The only car comparable of those mentioned is the Phaeton. It's a better car, but it priced itself out of the U.S. market. Unlike the Phaeton, the Genesis is priced much lower than it's competition - and is basically just as good in all areas...

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[JOwest]

Most consumers don't think or know too much about Mitsubishi. Car nuts appreciate the Lancer EVO and that is about it. Mitsubishi recently announced it will stop selling the Gallant sedan after the current model. Hyundai is different, its market share is on the rise in NA.

 

[Calvin]

I read an article from a person who lives in Korea and he said that in order to gain market share at an accelerated pace Hyundai is selling the Genesis in the US at break even for the V6 or at a loss for the V8. He says that people are up in arms in Korea since they have to pay over $8,000 more for a Genesis than we do in the US! Not sure if this is accurate or not but I did see a short video of a couple saying they could fly to the US to buy a car and ship it back cheaper than buying one down the street. I wonder if they have unleaded in Korea?? If this is true then its one heck of a commitment to establish their new brand! Undercut the competition, get the cars sold and people who own them will help advance the brand reputation. Now all we need are a few more ship loads for Xmas!!!!

 

[Simonwpb]

BigTrace,
Thanks for the thread, some interesting discussions on brand image and expectations for brand value to succeed in the lux market.

I agree with Stormy's comments that in order to achieve the Lexus experience you describe it will inevitably drive up the total cost of ownership. Free maintenance is a bolt-on price from either the dealer or the manufacturer. Red carpet treatment on the other hand requires a significant investment in facilities that I don't see Hyundai or their dealer network making in this economic environment.

In fact I would make the case given the worst month of auto sales in decades that US consumers are more likely to be attracted to affordable luxury without paying for all the other stuff...

 

[BigTrace]

Most consumers don't think or know too much about Mitsubishi. Car nuts appreciate the Lancer EVO and that is about it. Mitsubishi recently announced it will stop selling the Gallant sedan after the current model. Hyundai is different, its market share is on the rise in NA.

Mitsubishi's bread and butter car is the Eclipse, but I think it is even losing ground. I expect Mitsubishi to be out of the car business in the near future.

 

[BigTrace]

I read an article from a person who lives in Korea and he said that in order to gain market share at an accelerated pace Hyundai is selling the Genesis in the US at break even for the V6 or at a loss for the V8. He says that people are up in arms in Korea since they have to pay over $8,000 more for a Genesis than we do in the US! Not sure if this is accurate or not but I did see a short video of a couple saying they could fly to the US to buy a car and ship it back cheaper than buying one down the street. I wonder if they have unleaded in Korea?? If this is true then its one heck of a commitment to establish their new brand! Undercut the competition, get the cars sold and people who own them will help advance the brand reputation. Now all we need are a few more ship loads for Xmas!!!!

The dealer I went to claimed this exact thing. They sold 5 Genesis's, 3 of which were immediately shipped to Korea because the cost difference was about $15,000. I believe this was probably due to the US's weak dollar more than the "loss leader" affect of the car itself although I do believe that part of this does have something to do with it. In Korea, there is no brand image problem so you can sell it higher than you can here.

 

[BigTrace]

BigTrace,
Thanks for the thread, some interesting discussions on brand image and expectations for brand value to succeed in the lux market.

I agree with Stormy's comments that in order to achieve the Lexus experience you describe it will inevitably drive up the total cost of ownership. Free maintenance is a bolt-on price from either the dealer or the manufacturer. Red carpet treatment on the other hand requires a significant investment in facilities that I don't see Hyundai or their dealer network making in this economic environment.

In fact I would make the case given the worst month of auto sales in decades that US consumers are more likely to be attracted to affordable luxury without paying for all the other stuff...

Simon,

Yes it will drive up the costs of the vehicle, no doubt but were talking about "Brand Image" which is where the car will suffer if not handled correctly. I do agree with you in that I personally don't really need the perfect dealer experience nor the free maintenance but many many people want that, especially for their wives who ultimately drive the cars. It takes the guesswork out of what you need at the dealership when you bring the car in for service. Most women are instructed to go to the dealer when the light goes on the dash board, simple. Guys on the other hand are usually more experienced and can take the car to the maintenance spot of their choice.

If the car is truly being sold as a "loss leader", it will eventually have to go up in price which doesn't bode well for the future. The closer in price that this car gets to the other luxury brands, the LESS sales it will produce I think simply because you can get the same value in a luxury line versus a Hyundai.

 

[Sal Collaziano]

If the car is truly being sold as a "loss leader", it will eventually have to go up in price which doesn't bode well for the future. The closer in price that this car gets to the other luxury brands, the LESS sales it will produce I think simply because you can get the same value in a luxury line versus a Hyundai.

Keep in mind that this is exactly what Lexus did with their LS. There will never be another LS - but the Genesis is the closest thing to it. This car is truly a game changer. If enough people buy this car - and I think eventually we're going to see a lot of Genesi on the road - than perception for Hyundai will change. Once that perception has changed, Hyundai will be able to sell less vehicles for more money - close to the competition - just like Lexus...

 

[BigTrace]

Keep in mind that this is exactly what Lexus did with their LS. There will never be another LS - but the Genesis is the closest thing to it. This car is truly a game changer. If enough people buy this car - and I think eventually we're going to see a lot of Genesi on the road - than perception for Hyundai will change. Once that perception has changed, Hyundai will be able to sell less vehicles for more money - close to the competition - just like Lexus...

While I do agree that the car is a "game changer" for Hyundai, Lexus already had an advantage with the LS. Toyota was an already popular brand when Lexus was introduced and people had no real pre-conceived notions about vehicle quality as the quality issues had been addressed from the 70's going into the 80's. With Lexus being launched in 1990, it was able to get the Toyota faithful to come and look as there were no other "Japanese" luxury cars at the time, just German, Italian etc.

Hyundai doesn't have that and did not launch this car under a different branding. The preconceived notion that most non-Hyundai owners have is that Hyundai is NOT a quality brand as they went through a lot of hurdles early on in their existance. Nobody wants their car in the shop all the time no matter how good the warranty is. I do think that their image has improved over the years and to me, worthy of a look, especially with this car.

My point is that a "loss leader" is supposed to bring customers into your lot to buy the car, but many times, the "loss leader" is the most stripped down version of the car and the salesmen always try to upsell their potential customers to something that is more profitable. If the Genesis line is considered a loss leader right now (by selling the car just at cost), Hyundai would be taking a HUGE bath on it considering all the advertising to get it sold and out in the publics eye. Once they are convinced that the car has enough of a following, they will raise the prices, no doubt, but once you start doing that, your killing THE biggest sales advantages you have - Price. Once that price starts creeping up towards the rest of them (Lexus, Mercedes, BMW), the image (which again, hasn't changed enough) starts playing more and more of a role when it comes to making a decision on a purchase and will lead to fewer sales because given the same (or approximately the same) price point, people will always choose what is considered a better brand.

In my opinion, if Hyundai see's enough of a market for this car and it sells the way they project it too, then maybe they WILL launch a luxury line and push this model into it along with another model or 2. That would make sense, but for now, it's still kind of a crap shoot.

I do agree though that they really couldn't have asked for a better market right now. Being financially strapped forces people to watch their penny's even more and this becomes a very enticing product from that aspect. Companies like Costco and Sams will do very well during a bad economy and so should Hyundai as opposed to the higher end.

 

[Simonwpb]

If the car is truly being sold as a "loss leader", it will eventually have to go up in price which doesn't bode well for the future. The closer in price that this car gets to the other luxury brands, the LESS sales it will produce I think simply because you can get the same value in a luxury line versus a Hyundai.

I would argue that this is not a loss leader in the sense of getting someone in the door, but as a tool to improve the brand image to a wider percentage of the market. Hyundai actually measures the percentage of consumers who would consider purchasing their brand. Improving brand perception takes years. The price of a Genesis will go up in relation to the value of the brand over time. The car is really worth more compared to the competition but is currently discounted because of brand perception. There was a time when Toyota had a poor quality reputation and look where they are now!

 

[JOwest]

I wouldn't be too surprised to see the price of Genesis to go up in the next years. That is good news to us current owners. That means the resale value of our Gen will go up as well!