Hyundai Equus: Is real luxury the car or the brand?

[Disaster]

I'm talking about retail prices for the high-end Seiko dive watches.

For instance, the Seiko Spring Drive Chronograph had a MSRP of around 5,500 Euros in 2007.

http://www.seikowatches.com/baselworld/2007/press/details/070412_04.html

And regarding Rolex, Omega and Panerai - the prices for Rolex's and Omega's most popular and compared models, the Sub and the Seamaster, were around the same ballpark 40-45 years ago (w/ the Sub being a little more expensive); but through better marketing and strict price controls over the years, the retail price for the Sub has surpassed that for the Seamaster by quite a bit.

Panerai became a pretty hot watch brand due to its popularity w/ celebs like Stallone, but not long ago it was an obscure Italian watch brand that supplied watches to the Italian navy (albeit for a time, Panerai watches had Rolex movements) and didn't have a retail business.

Hmmm, I take it you are a fellow watch aficionado. As you know, the MSRP's for watches can be just silly. Invicta cracks me up the most. Own this $1,400 Invicta limited edition for $69.99!!!

Speaking of that, Invicta has some OK watches...and a huge boatload of ugly and copycat stuff.

Rolex is one of the "mainstream" manufacturer's that depend on their own movements, that adds "caché." Omegas use mostly ETA movement, or slightly modified ones...except for the co-axial movement which is an Omega exclusive.

Most other brands, Gucci, Luminox, Breitling, IWC use Seiko, Citizen, Orient or ETA movements, though, like everything else, there are now cheap Chinese movements on the market that are basically poor copies of the other brands. Some buy movements with special coatings and other claim to "tune" them to a higher level (like IWC does with ETA movements.) From that standpoint an IWC might be compared to an AMG Mercedes or an M-series BMW.

 

[sandy]

I think you will have the same customers as the GENSESIS sedan. Smart, economical consumers who took a hard look at the product, ignored the label and found it the best car in class with real world performace and build quality. Ten years ago would I have even thought of buying a Hyundai? No way. Now, Genesis, Equus- hey they are great products and bargain priced vs. the cars they were built to compete against. Plus, do I want a GM Caddy product owned by Obama? No. Do I want a Mercedes that is far below Hyundai in reliability plus taking an extra $15 to $40K from my wallet? No. A BMW or Audi- sure I would partake- if you were paying the car payment!

A good car is a good car. Hyundai is making not only a good car, but a great car and making an outstanding statement.

I agree with much of what you say, but we are the "converted" insofar as accepting the Hyundai brand. Most consumers willing and able to spend upwards of $50k on a car want a lot more than a car. They want a badge, a symbol, something that says with absolute clarity and no need for explanations or rationalizations that he/she is a success, brilliant, affluent or has great taste. Mercedes, BMW, and Lexus have spent millions in advertising to provide just such ego support. At some time in the future, Hyundai may achieve this status via the Genesis and Equus, but I doubt they are there now.

Never underestimate the power of a brand. I learned this over many years in the advertising biz. While consumers will always give rational reasons for their purchases, insightful reading of the research usually reveals their true motives are similar to the ones I mentioned above.

I think the best customer for the Equus will be that segment of consumers called "first adopters". Their satisfaction comes from being unique and first on the block to own something new.

 

[Mark_888]

Likely, not too many Hyundai/dealer employees able to afford an Equus outside of the top Hyundai USA brass and owners of dealerships.

Hyundai has over 750 dealers in the US and Canada, and the dealership owner and dealership GM are both potential buyers.

Recent immigrants from Korea probably wouldn't have an issue, but the vast majority of Korean-Americans buy Honda/Acura and Toyota/Lexus.

As Hyundai quality improves, that will change. The availability of Genesis and Equus will also change that to some degree.

HMA said it shooting for about 1-3K Equus unit sales per year, so the above groups could provide the bulk of the early sales.

 

[bjjones]

I agree with much of what you say, but we are the "converted" insofar as accepting the Hyundai brand. Most consumers willing and able to spend upwards of $50k on a car want a lot more than a car. They want a badge, a symbol, something that says with absolute clarity and no need for explanations or rationalizations that he/she is a success, brilliant, affluent or has great taste. Mercedes, BMW, and Lexus have spent millions in advertising to provide just such ego support. At some time in the future, Hyundai may achieve this status via the Genesis and Equus, but I doubt they are there now.

Never underestimate the power of a brand. I learned this over many years in the advertising biz. While consumers will always give rational reasons for their purchases, insightful reading of the research usually reveals their true motives are similar to the ones I mentioned above.

I think the best customer for the Equus will be that segment of consumers called "first adopters". Their satisfaction comes from being unique and first on the block to own something new.

Very good post!

 

[YEH]

Hmmm, I take it you are a fellow watch aficionado. As you know, the MSRP's for watches can be just silly. Invicta cracks me up the most. Own this $1,400 Invicta limited edition for $69.99!!!

Speaking of that, Invicta has some OK watches...and a huge boatload of ugly and copycat stuff.

Yep - Invicta is mostly crap w/ some OK stuff (but you've got to hand it to their marketing dept.); Sector is the way to go for decent quality "no name" watches.

As for Rolex - while great marketing and careful management of supply is a big reason for their ever escalating prices, they no doubt, played a hand in a no. of innovations.

But in a way, they are like Bose (except Rolex actually has cred among watch aficianados) where the general public thinks they are the "best" - when there are actually higher-end, more exclusive brands like Patek, Audemars Piguet, Jaeger-LeCoultre, etc.

I agree with much of what you say, but we are the "converted" insofar as accepting the Hyundai brand. Most consumers willing and able to spend upwards of $50k on a car want a lot more than a car. They want a badge, a symbol, something that says with absolute clarity and no need for explanations or rationalizations that he/she is a success, brilliant, affluent or has great taste.

Never underestimate the power of a brand. I learned this over many years in the advertising biz. While consumers will always give rational reasons for their purchases, insightful reading of the research usually reveals their true motives are similar to the ones I mentioned above.

All true - but I'm just speaking as to what the likely market for the Equus will be.

Hyundai brass, themselves, know that the Equus will be a low-volume seller and have planned accordingly.

That's also why a plan to launch a premium brand is in the works.

As for Lexus tho, I would say that the success of Lexus early on had more to do w/ price than any allure from the Lexus brand name (since there really wasn't any at the start).

The LS400 originally had an MSRP of $35k - which not only undercut the S Class and 7 Series by quite a bit, but was also cheaper than a no. of trims of the E Class and 5 Series.

Hyundai has over 750 dealers in the US and Canada, and the dealership owner and dealership GM are both potential buyers.

HMA said it shooting for about 1-3K Equus unit sales per year, so the above groups could provide the bulk of the early sales.

Didn't someone report that the 1st year's installment was already spoken for?

Anyway, I don't disagree that many owners of dealerships will be among the 1st "buyers", but I was speaking more along the lines of prospective buyers for the year after and so on.

 

[Disaster]

Anyway, I don't disagree that many owners of dealerships will be among the 1st "buyers", but I was speaking more along the lines of prospective buyers for the year after and so on.

I'm sure the better off dealers/owners and Hyundai execs will want to buy them but auto companies often don't allow dealers and empolyees to purchase new hot products at their standard discounts because they want them to get in the hands of the general population as fast as possible. Later, they remove these restrictions. That will happen a lot faster if they don't sell.

 

[GripperDon]

IMO The Genny look Better inside and out. If they offer a new Genny with:
1. Good Leather.
2. Front passenger seat with same stuff as the Driver.
3. Truly Good NAV, full Ipod support and expanded voice control.
4. A really descent suspension with Even Manually selectable soft / Firm ride,
5. Stronger gas strut on rear Trunk.
6. Offer the rear seat stuff as options.

Then back it up with real dealer support and tech training.
Result no Equus needed. Save the separate ad budget, launch costs and cost of maintaining a separate line.

Hyundai is just going to have 2 car lines they re not making the desired headway with. The Equus is in the wrong price range to compete and be as winner but the Genny can be. With the increased volume they will bring their manufacturing and distribution costs down and have a real winner in the total income and earning's they need.

But who am I, Just the 800 lb Gorilla.

 

[Mark_888]

The Equus was design for the captive Korean market and when originally conceived there was no serious thought of exporting it to North America. Even now that it is coming to North America, the sales projections are extremely modest (about 2K units per year). Hyundai sells over 3 million vehicles a year and they can afford some promotional expenses to build the brand reputation, both domestically and abroad. Therefore, it is pretty much irrelevant to Hyundai Korea as to how many Equus they sell in North America.

 

[GripperDon]

If it is so irrelevant then keep it at home, thank you very much. It just degrades the Genny and we have enought of that already. Seems that Hyundai just can't get out of their own way. Nav support is a good example not to mention my favorite subject.

 

[jwaters943]

If by Nav support, you mean updates, most of the complaints seems no different than other makes I've experienced, including Mitsubishi, Honda/Acura, BMW and Lexus. And how does the Equus' presence in North America degrade the Genesis?

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[sandy]

If it is so irrelevant then keep it at home, thank you very much. It just degrades the Genny and we have enought of that already. Seems that Hyundai just can't get out of their own way. Nav support is a good example not to mention my favorite subject.

Can't get out their own way? Their profitability is among highest in the industry (good management), they keep breaking sales records, (consumers demand their products) and their stock has tripled over the last year (happy investors).....Don, would you propose we fire the current management?

 

[GripperDon]

The Equus degrades the Genny by now taking over the "Top of the Line" position it says to the public if you want the bet Hyundai has to offer, buy an Equus.


I would get rid of the present management if their duties includes getting repeat buyers for the new "Luxury Market" They may have good senses in what areas to develop new car to sell in but they stink in Strategic thinking regarding the development of a Luxury Brand Loyalty, that can only be "Earned" with outstanding customer communication and support.. IMO Hyundai management should be reading every singly word written on the boards and take a pro-active stance in contacting customers to address their problems. The news would race Thu the in dusty and then they "Would have to care" if they sold many Equus or Gennie's because they wold be.

Finally the Genny price point is the ONE PLACE where they can make Hay. Nobody really thinks that a Hyundai (Equus) will succeed where the VW Phaeton could not. That price point belongs to the German elite.

 

[jwaters943]

That price point you are referring to is occupied by the E Class, not the S Class. Just as the Genesis competes w/ the C Class in terms of price, and not the E Class. The Equus is priced below every vehicle in it's size class, including the now defunct Phaeton.

 

[DavidNJ]

With any luck a fully equipped Equus will be discounted to $49k.

 

[Mark_888]

With any luck a fully equipped Equus will be discounted to $49k.

Maybe, but doesn't seem likely since a dealer authorized to sell the Equus is required to have a separate showroom area, provide pick up and delivery for all service, have specially trained sales and service personnel, etc. Given these extra costs, and that only select dealers will sell it (less competition), I would not expect to see a lot discounting (and maybe no discounting) in the first few years.

 

[GripperDon]

1.My Phaeton cost $53K out the door.
2. The Genny competes with the C class on features and if properly delivered as outlined before it would compete with the E class on features.
3. I never said the Genny competed with E or S on Price.
4. Regardless of price, the Equus will not compete with the top of the German vehicles, MB, BMW, Audi, etc.
5. The Equus will be over priced compared to the real differences from the Genny. Put in a real suspension, fix the Genny's NAV, Ipod support, passenger seat and a couple of other minor things and their is no ( IMO ) reason for a Equus. More unnecessary do-dads and a silly hood ornament don't hack it. At least not in my measure of value. The Genny has it all over the Equus. That is what Hyundai should capitalize on, the Genny as the greatest bang for the buck, just deliver it measuring up to the promises and support it with true dealer support and then cart home the money and the start of a new kind of Prestige badge, that will have the German guys shaking their heads in disbelief. Go Hyundai!, Get it right!, we need fullfitment not another vehicle that costs more.

 

[jwaters943]

1.My Phaeton cost $53K out the door.
2. The Genny competes with the C class on features and if properly delivered as outlined before it would compete with the E class on features.
3. I never said the Genny competed with E or S on Price.
4. Regardless of price, the Equus will not compete with the top of the German vehicles, MB, BMW, Audi, etc.
5. The Equus will be over priced compared to the real differences from the Genny. Put in a real suspension, fix the Genny's NAV, Ipod support, passenger seat and a couple of other minor things and their is no ( IMO ) reason for a Equus. More unnecessary do-dads and a silly hood ornament don't hack it. At least not in my measure of value. The Genny has it all over the Equus. That is what Hyundai should capitalize on, the Genny as the greatest bang for the buck, just deliver it measuring up to the promises and support it with true dealer support and then cart home the money and the start of a new kind of Prestige badge, that will have the German guys shaking their heads in disbelief. Go Hyundai!, Get it right!, we need fullfitment not another vehicle that costs more.

1) But $53k wasn't the MSRP on a new Phaeton now was it? It's pointless to compare the MSRP of the Equus against your sales price on a Phaeton several years ago.

2) And?

3) I never said or attempted to infer that you did, just merely stated that both the Equus represent a significant savings over most/all luxury automobiles of the same general size.

4) Mostly agreed. I think it could steal some sales from the LS and even the new M which can be optioned up to approx. $70k, but most German luxury car buyers would probably not seriously consider any Hyundai, no matter how good.

5) Those sour grapes you're eating, how are they?

 

[DavidNJ]

I think German E-class, 5-series, and A6 buyers would consider an Equus or a Genesis. And I think the Equus will compete with the Infiniti M directly.

However,

1) The Equus will not be competing with the S-class, 7-series, and A8. It isn't length and wheelbase that determines that class an Hyundai dealers can't compete. The only S-class buyer considering an Equus, either works for Hyundai, works for a Korean firm, does business with a Korean firm, or is Korean.

2) To compete with the E-class, 5-Series, A6 the Equus needs to be priced below them. This is a lesson Acura seems slow in learning with its RL. It thinks the RL should go head to head with the Infiniti M. Buyers think it goes head to head with the G. They sit on the lot until they are sold $6k under invoice.

3) VW needed to price the Phaeton at around $50k, maybe $59 for the W-12. At that price it would have sold. Like Hyundai, the VW sales/service experience isn't correct for the higher price range. Nissan has learned this with the GTR, which should have been an Infiniti. Chevy gets away with this on the Corvette because it has had 65 years to develop a following. Even so, most Corvettes on dealer's lots are under $50k (dealer's specializing in Corvettes, such as Kerbeck, excepted).

At $55-65k 2000 units will be a hard sell. At $47-$52k they could probably move 10-15k in my SWAG.

 

[Simonwpb]

JW - thanks for posting this video, it was great.

I have always loved the dichotomy of true price value versus brand premium that the Hyundai Genesis offers. Lets be honest here Hyundai is fighting the image in the USA as a cheap brand, while trying to establish a luxury line "on the cheap".

Time will tell if the store within a store concept works, but these vehicles have undoubtably raised the perception of the Hyundai brand in America. A significant number of potential customers are not ready for the "H" though

 

[ilovejdmtoy]

I have sit in this car before (in 2009 LA Auto Show) and oh, man this is a truely a luxury car and better than Lexus and Mercedes.

I think sooner or later, Hyundai will come out with a sub brand like Lexus towards Toyota, a name brand Luxury line and I am waiting.