Hyundai to sell 50,000 Genesis per year, Sonata hybrid coming in 2010

[Sal Collaziano]

Filed under: Coupes, Hybrids/Alternative, Sedans/Saloons, Hyundai


Click above for a high-res gallery of the Hyundai Genesis sedan.

Hyundai's first foray into the world of rear-wheel-drive needs to be a success in order to justify the development, manufacturing and launching costs. Hyundai's vice president for product development, John Krafcik, told reports that the automaker expects to sell 50,000 Genesis models annually in the U.S. - 20,000 sedans and 30,000 coupes.

But the Genesis is only part of Hyundai's image makeover. The Korean manufacturer intends to launch its first hybrid model by 2010, equipped with a next generation lithium-ion battery pack. According to Krafcik, "Our first U.S. hybrid is going to be the Sonata," however, Hyundai has no plans to offer the new sedan with a plug-in option. That's a strategy that's served Toyota well, and Hyundai is clearly trying to follow in the Japanese juggernaut's footsteps.

Gallery: 2009 Hyundai Genesis Sedan



Gallery: Hyundai Concept Genesis Coupe



[Source: Automotive News - Sub. Req.]

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[mkaresh]

Thanks for posting this. I've been wondering about their volume targets. 20,000 is a good stretch goal--not easy, but doable.

The coupe target of 30,000 could be harder to hit. Depends on pricing, and the strength of that segment.

 

[cabz]

It would have been much easier to hit their goals if they had delivered as originally promised. Now, I'm not as sure.

 

[Simonwpb]

...The target would represent a boost of about 10 percent to Hyundai's 2007 U.S. sales total from the new upmarket Genesis, the automaker's most ambitious and expensive vehicle yet.

Krafcik said Hyundai could expect to ramp up to sales of about 20,000 Genesis sedans and about 30,000 Genesis coupes annually in the U.S. market.

But for 2008, it has set a more modest goal of selling 8,000 new Genesis sedans in the United States. For August, sales are on track to near 1,200 units, Krafcik said.

Hyundai is rolling out the Genesis with a high-profile marketing campaign including television ads during the Olympics intended to underscore the Korean automaker's arrival as a cut-rate competitor to the likes of Lexus, Cadillac and BMW.

Hyundai is counting on the launch of the rear-wheel drive Genesis to boost sales of its other models and to improve the image of a brand that got its start in the U.S. market as a cheap alternative to established U.S. and Japanese nameplates.

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN2044336820080820

...Part of Hyundai's strategy is to reduce the share of American consumers who say they would never buy its cars, a category of consumers Krafcik called "active avoiders."

Hyundai's own research shows that the share of U.S. car buyers who have ruled out Hyundai dropped to 39 percent this year, down from 54 percent in 2005.

The hope is that the "halo" effect of the Genesis, which carries no visible Hyundai badge on its grill, will win over even more consumers, Krafcik said.

 

[BaywayRic]

Forgeting July, to hit 8000 in 2008 they need to sell 1600/mo for 5 months. Given approximately 750 dealers, that's 2.1 cars per month. For 2009, to sell 20000 vehicles, they need 1666.6 cars per month, or 2.2 cars per month per dealer. I would guess 2 cars a month is a no brainer, even for the untrained. For every dealer who SELLS NONE, that's 24 cars that need to be sold somewhere else. In large markets, I understand they already have 20+ in inventory.

 

[cabz]

In large markets, I understand they already have 20+ in inventory.

Roseville Hyundai here in town, which claims to be the highest volume dealer in California, has 22 in-stock, but it appears they aren't moving many because they've been stuck at 22 for 2 weeks now.

If they would have delivered on their original comments to sell the car starting at 'well under $30,000', and to stock it with all of the features/options they claimed it would have, I would already have one. As it stands, I'm thinking I may just lease something else and see how the reliability and depreciation really play out. It's a beautiful car, and it's still a great deal for those who were looking at BMW/Mercedes/Lexus, but I think missing their price target is going to hurt with the move-up segment (those like me looking to buy something nicer than a Camry/Accord/Sonata but not originally in the market for BMW/Lexus/Mercedes).

 

[EdVoylesHyundai]

Cabz, the Azera fills that above Camry/Accord below BMW/Lexus segment nicely. Pricing the Genesis right on top of that would have cheapened it too much and put it in direct competition with the Azera.

I say why not have your cake and eat it, too? Lease a Genesis for 2 years for a monthly payment less than you would pay to buy an Accord or Camry and see how the reliability and depreciation play out. If it plays out in your favor, you have equity. If it plays out poorly, turn in the keys and walk away. You can't lose. Plus you get to drive a Genesis for 2 years.

 

[mkaresh]

How well is the Genesis selling/leasing in Marietta?

At first I misread your post, as if someone could lease a Genesis for less than they could lease an Accord or Camry. Then I noticed that you said less than it costs to BUY an Accord or Camry. Not quite apples to apples.

 

[Flex59]

Call me crazy, but, as much as I LOVE my Genesis Sedan, I would love it if Hyundai would consider and bring to the U.S. market a Coupe based on the Genesis Sedan. In other words a CL like car. I think that would be awasome!

What do you guys think, give me some feedback.

Flex59

 

[mkaresh]

Supposedly the Genesis coupe is based on the sedan. But it's more Infiniti G37 than Mercedes CL, and a V8 isn't going to be offered. There's a very small market for large coupes.

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[Simonwpb]

Who knows how many new models Hyundai has in the pipeline over the next 12-24 months? If the Genesis starts to exceed sales projections it will certainly encourage more lux variations on the Genesis platform.

 

[mkaresh]

Unless gas prices drop, their focus will probably be elsewhere.

Latest news is they might import the tiny i10, which is about as far from the Genesis as you can get.

 

[stimr2]

I don't think its a good idea for Hyundai to pump out more luxury models. Especially with the high gas prices and the downturn in the world economy. In Korea, Hyundai was being criticized for it's timing of the Genesis and Mohave/Borrego. But we'll just have to wait and see.

I hope Hyundai can reach those sales goes. But with the recent popularity of Japanese cars in Korea. Its not looking too good for Hyundai. A lot of the Korean newspapers aren't saying a lot optimistic things about Hyundai. But it could be that they're pissed they have to pay more for the Genesis. I also know that Koreans are buying the Genesis in the states and shipping them over to Korea. Its not just cars but electronics as well.

 

[cabz]

Cabz, the Azera fills that above Camry/Accord below BMW/Lexus segment nicely. Pricing the Genesis right on top of that would have cheapened it too much and put it in direct competition with the Azera.

I say why not have your cake and eat it, too? Lease a Genesis for 2 years for a monthly payment less than you would pay to buy an Accord or Camry and see how the reliability and depreciation play out. If it plays out in your favor, you have equity. If it plays out poorly, turn in the keys and walk away. You can't lose. Plus you get to drive a Genesis for 2 years.

I hear what you're saying, but part of my excitement for the car faded with the price tag. To me, the Azera is a non-starter. It may have some nice features, but the styling isn't nearly on par with the Genesis (personally, I think the Sonata looks better because I can't stand those bulging rear hips on the Azera). I realize that starting below 30k may have cannibalized some of their Azera sales, but is it really that uncommon for car companies to have overlap, especially between two divisions (and clearly, Hyundai is trying to build a new division starting with the Genesis) - Maxima/G35; Accord/TSX; Avalon/ES; etc.

I still believe the Genesis is a great value, but over promising and under delivering isn't a good strategy and that is exactly what Hyundai has done - the base model is priced quite a bit higher than they claimed and the loaded V6 and V8 are missing some of the features.

Given all that, I may still lease a Genesis, as I agree that there isn't much risk in doing so and it wouldn't cost me much more than buying and being upside down on a Camry/Accord/etc.

 

[Simonwpb]

Regarding the last 2 posts, first the US version of the Genesis has some differences from the domestic production model in terms of options and features (suspension, some of the electronics options etc). The US version has been somewhat stripped down to keep the cost low (only one AC seat!). Koreans have a right to be indignant that the car is being sold overseas for less money, but if Hyundai did not have such a negative brand perception in the USA then it would obviously be sold here for a higher price.

The issue of the US price going up from initial proposed pricing of 30K has got to be a function of exchange rates. In the last year there has been a 10% shift in the value of the won to the dollar, so unless you want to pay for your Genesis in Won that explains the 10% increase in the MSLP of the car.

 

[cabz]

Regarding the last 2 posts, first the US version of the Genesis has some differences from the domestic production model in terms of options and features (suspension, some of the electronics options etc). The US version has been somewhat stripped down to keep the cost low (only one AC seat!). Koreans have a right to be indignant that the car is being sold overseas for less money, but if Hyundai did not have such a negative brand perception in the USA then it would obviously be sold here for a higher price.

The issue of the US price going up from initial proposed pricing of 30K has got to be a function of exchange rates. In the last year there has been a 10% shift in the value of the won to the dollar, so unless you want to pay for your Genesis in Won that explains the 10% increase in the MSLP of the car.

I think the reasoning behind the shift is obvious, but that doesn't excuse them for not delivering. The dollar has been getting hammered for over 2 years now, and surely they should have had a good idea on launch of what the actual options would be.

 

[Simonwpb]

The dollar has been getting hammered for over 2 years now, and surely they should have had a good idea on launch of what the actual options would be.

I am certainly no currency trading expert, and we all know the value of the dollar to the Euro has been steadily declining for a long time, except recently.

However check out the 2-year currency chart attached. You can see that starting in November 2007 the dollar started strengthening against the Korean Won, reversing the weakening trend in 2007. Compare this timing to when comments on US pricing for the Genesis were being made.

I think the 10% cost shift does not work in the Koreans favor. I also uploaded a 5-year currency chart for long-term comparison.

 

[DanTheMan]

Supposedly the Genesis coupe is based on the sedan. But it's more Infiniti G37 than Mercedes CL, and a V8 isn't going to be offered. There's a very small market for large coupes.

"Large coupe..."....sounds a lot like another phrase of interesting value..."military intelligence"!

 

[stimr2]

Hopefully the Genesis coupe is good as Hyundai says it is. It was a great idea for Hyundai to welcome tuners. I wish more companies were tuner friendly. Anyway, I plan on replacing my STi with a Genesis coupe. I'm growing out of my boy racer phase. Of course I would get the track verison with the 2.0 Turbocharged GEMA/Theta engine.

 

[mkaresh]

I am certainly no currency trading expert, and we all know the value of the dollar to the Euro has been steadily declining for a long time, except recently.

However check out the 2-year currency chart attached. You can see that starting in November 2007 the dollar started strengthening against the Korean Won, reversing the weakening trend in 2007. Compare this timing to when comments on US pricing for the Genesis were being made.

I think the 10% cost shift does not work in the Koreans favor. I also uploaded a 5-year currency chart for long-term comparison.

So much for the currency explanation. The recent strengthening of the dollar againsts the won should have enabled them to price the car lower than planned around the beginning of the year.