Hyundai's challenges with the 3rd Generation Genesis (speculation)

[Aquineas]

Many (perhaps most?) of us enjoy our 2nd generation Genesis sedans. Some of us who owned the 1st generation can attest to the improvements made between the 1st and 2nd generations. Right now, Hyundai engineers and executives are planning the third generation, and they have some big decisions to make.

The biggest decisions involve mass, branding, and cost. I'll offer my perspective on the challenges and I'd love to hear what others think.

• Mass. The Genesis is a solid car. Hyundai was liberal in their use of high strength steel; more than 50 percent of the steel used in the car is high strength or ultra high strength steel. Hyundai wanted a car that felt solid and substantial, so they loaded it up with lots of steel and lo and behold, they built one. The problem with this is, with such high steel content, it leads to increased mass, and in an increasingly competitive luxury market, there's no way that the 3rd generation will be able to continue to compete unless it goes on a serious diet.
  
  The BMW 7 series uses a combination of carbon fiber, ultra-high-strength steel, and aluminum to save nearly 200 pounds. The next generation Mercedes E-Class is set to debut soon as well, and while they haven't publicly disclosed their chassis improvements, it's probably safe to assume that they've got something up their sleeve. By the time the 3rd generation Genesis sedan is released, Audi will have their next generation A6 on the market as well (probably in 2019). And let's not forget the Lexus LS which has been on it's current chassis since 2006 and is (over)due for a refresh. My point is, by the time the 3rd generation Genesis is due to hit the market, its competitors will all have lost a lot of weight, and the Genesis will need to exceed that standard.
  
  The problem is that the current ways of vehicle weight reduction (increased use of aluminum in the chassis and body panels, use of carbon fiber and carbon re-inforced plastics) cost a lot. I can't see Hyundai doing too much with carbon fiber with the 3rd generation due to lack of manufacturing expertise, so that leaves aluminum. Lots of aluminum. The problem even with aluminum is, Hyundai doesn't own 4 aluminum mills like they do steel mills. And if they do want to provide their own aluminum supply (as they do steel), then the cost of entry is about 1-2 Billion a mill (which seems like a lot, but this is also a company that just spent $10 Billion to buy prime Seoul real-estate, so maybe it's really not). However they go about doing so, expect the next generation Genesis to be a lot lighter, and have a much higher aluminum content.
  
  
• Brand. I believe I read when the 1st generation Genesis was launched, that it would cost a half a billion to launch an upmarket luxury brand (which is nearly the total development cost for each generation Genesis). Hyundai decided back then not to invest that capital and instead take a "wait-and-see" approach. I believe Hyundai will launch an upmarket luxury brand for the 3rd generation. This will also benefit them when the coming 3-series competitor is launched. The thing is, the cost of rolling your own brand hasn't gone down, which means...
  
  
• Vehicle Cost is going up. Between losing some of the cost-benefits of rolling your own steel, the potential cost of building your own aluminum mill (not strictly necessary, but the Koreans like to own their own infrastructure, because well, they just love kicking everyone's ass), the cost of rolling out your new brand, in addition to an increase in development costs for the new vehicle for technology integration and power-train innovation, I think we will see the cost delta between the Genesis and its competitors narrow somewhat. Hyundai would like to see it narrow a lot, which they will need their own luxury brand to do.

I think the early success of the 2nd generation Genesis is very helpful at this point because at a time when Hyundai executives are having to think long and hard about writing some pretty big checks, the market, at this point anyway, is reaffirming that some of their previous decisions are correct. The Genesis seems to be increasing in market momentum.

 

[Sal Collaziano]

Weight is definitely a big issue. And I'm sure Hyundai is planning on a lighter third generation Genesis Sedan. I wonder what they did with the second generation Genesis Coupe. We'll find out soon enough. But weight is definitely a problem. The second generation Genesis Sedan is slower because of the added weight. It's really noticeable with the V6.

I wish I knew what they were planning as far as 'brand' goes. My prediction is that it'll be one more generation of Genesis vehicles with Hyundai badges on them. Hyundai still feels the Sonata and Elantra aren't getting test driven by people looking for a new Toyota, Honda or Nissan - and that tells me they still need cars like the Genesis Coupe, Sedan and Equus to wear "Flying H" badges for the time being.

 

[jimb100]

Mass - I think we can safely assume the next generation Genesis will see the end of the V8, to be replaced by a twin turbo V6. I doubt the goal for such a car will be less than 4,000 lbs. Unless, of course, the car shrinks to the size of the E class or the A6. But I don't think that's likely as size and technology are a big part of Hyundai's value proposition. I don't think losing 2-300 lbs will necessitate dramatic changes in materials or structure.

Brand - Hyundai is a "family sedan" brand, like Chevy, Toyota, Ford, Volkswagen, etc. Having a $50K car at the top of the brand isn't a problem for them and won't be for Hyundai. The 'separate brand' luxury car market is pretty small and crowded, although profitable in the US. Thinking Hyundai can create a brand that will displace the "big 3" in Europe didn't work for Lexus and won't work for Hyundai.

Cost - I don't see a big reason for costs to significantly increase. That's Hyundai's edge and they'll maintain it.

Any speculation about the next 5 to 10 must address the elephant in the room - electric cars and self driving cars.

I bought my Genesis with the idea it would be the last gas powered car and the last one I have to drive. It wouldn't surprise me in the least if the big news for the 3rd gen Genesis is electric power and self driving. I can see the current design lasting 6-8 years, longer than usual rather than producing something obsolete upon introduction.

That's the game changer.

 

[Aquineas]

I appreciate the thoughts! If what you say is true about electric cars (and I generally agree with your conclusions of things transitioning, if not the same timeline), if anything, electric cars are heavier than their hydrocarbon counterparts (due to battery weight). The Tesla Model S is 4700 pounds. Weight will be an even bigger challenge then.

 

[xsolara]

All the above comments are very good and make sense
Excellent opinions

 

[Tpr5.0]

OP, that was a very detailed comparison and generation evolution description that made for a good read. The other comments were good as well. I'm happy I purchased my 2015 5.0 Ultimate.

 

[Sal Collaziano]

Thinking Hyundai can create a brand that will displace the "big 3" in Europe didn't work for Lexus and won't work for Hyundai.

Why does Hyundai "need" to displace with big 3 in Europe? Lexus didn't but I'm sure all their executives and stock holders are happy. Their customers are happy as well.

 

[Doc W]

This is a great discussion, and it's sure nice to see it taking place without that nutjob DRS jumping in to stir things up. . .

Doc

 

[OneFunGenesis]

Mass is the biggest problem with my current 4.6. Takes a lot of gas to get her going and takes a lot of force to get her stopped lol.

I wouldn't mind seeing a slightly less massive car but only where it doesn't need to be. A study by the University of Buffalo (UB) concluded that the more massive the ride, the safer it is (by a factor of 20% per $10,000 increase in price)

 

[amartz]

Any speculation about the next 5 to 10 must address the elephant in the room - electric cars and self driving cars.

I think you left one possibility out: Hydrogen
http://www.caranddriver.com/reviews/2015-hyundai-tucson-fuel-cell-first-drive-review

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[OneFunGenesis]

I may have the unpopular opinion here but we will not see acceptance/use of full electric cars in mass market for another decade or so.

So far, nothing can beat the good ol' fossil fueled internal combustion engine at many, many things. Power, torque, ease of maintenance, price, weight, ability, versatility, etc.

There are exceptions to the rule, yes. But internal combustion engines are here to stay folks

 

[xsolara]

I may have the unpopular opinion here but we will not see acceptance/use of full electric cars in mass market for another decade or so.

So far, nothing can beat the good ol' fossil fueled internal combustion engine at many, many things. Power, torque, ease of maintenance, price, weight, ability, versatility, etc.

There are exceptions to the rule, yes. But internal combustion engines are here to stay folks

You're probably correct . If a miracle happens and electric cars become real popular our Electric grid could not handle the power load

 

[Aquineas]

Electric motors are already better than ICEs. The thing that needs to advance are the darned batteries .

 

[ksoze]

So far, nothing can beat the good ol' fossil fueled internal combustion engine at many, many things. Power, torque, ease of maintenance, price, weight, ability, versatility, etc.

Pretty sure many of those attributes are in the electric motors favor - at least power, torque and ease of maintenance.

 

[OneFunGenesis]

You're probably correct . If a miracle happens and electric cars become real popular our Electric grid could not handle the power load

That is a very important side point. Not to mention that electricity prices would spike as more and more people use them, thus limiting any advantage of the electric car.

Electric motors are already better than ICEs. The thing that needs to advance are the darned batteries .

Somewhat agreed. Power (horsepower) is still a bit hard to extract in the high end from an electric motor. And the battier need to improve by leaps and bounds...agreed!

Pretty sure many of those attributes are in the electric motors favor - at least power, torque and ease of maintenance.

Torque, absolutely. Power? I'll take the ICE. Its more reliable power and easier to make.

Ease of maintenance? Electric motors can have a multitude of things go wrong as compared to ICE's who (in a perfect world) need only Air, Fuel, and Spark. Porsche ran cars until 1993 on these three things alone lol

 

[Huddleston]

great discussion here, I think gasoline engines will be around for a while. part of the issue with electric cars is range and battery life along with the infrastructure to support charging stations nationally.... not just on the west coast.

 

[C-130Geek]

Electrics would also require a complete overhaul of the tax structure to support road maintenance.

 

[jimb100]

Why does Hyundai "need" to displace with big 3 in Europe? Lexus didn't but I'm sure all their executives and stock holders are happy. Their customers are happy as well.

Lexus displaced Cadillac and Lincoln. There is no Cadillac or Lincoln for Hyundai to make money by displacing.

Lexus has had to make their money in the US as they have never had sales success in Europe, or any where else, really.

Infiniti chose to take on Mercedes and BMW with the Q45 and failed. It set them back years.

Whose lunch do you think Hyundai will eat it it spends the money to create a separate luxury brand?

There's only Mercedes, Audi, BMW and Lexus. Jaguar sells little, Cadillac is a tough competitor where it has product.

 

[jimb100]

That is a very important side point. Not to mention that electricity prices would spike as more and more people use them, thus limiting any advantage of the electric car.


Somewhat agreed. Power (horsepower) is still a bit hard to extract in the high end from an electric motor. And the battier need to improve by leaps and bounds...agreed!



Torque, absolutely. Power? I'll take the ICE. Its more reliable power and easier to make.

Ease of maintenance? Electric motors can have a multitude of things go wrong as compared to ICE's who (in a perfect world) need only Air, Fuel, and Spark. Porsche ran cars until 1993 on these three things alone lol

While electric costs would go up, gasoline costs would disappear. A net reduction of costs to the consumer.

The big Tesla is one of the fastest cars in the world and will go over 200 miles on a charge. The big question is charging. Will gas stations switch over and become charging stations? I think they have to. Battery technology is constantly evolving as industry sees the handwriting on the wall. Relatively cheap gas gave no incentive to large capacity battery development but that is changing fast.

A switch to electric will have a huge impact on global warming, as will self driving cars, which will also have a huge impact on accidents. No more speeding, distracted driving, etc. I read a recent article that estimated emissions could be reduced by 80% using self driving cars. Less idling, no jack rabbit starts, etc.

I would think that within 5 years we will see self driving cars introduced at affordable prices and fast charging electrics at about the same time. Despite the Saudi attempts to gas cheaper and slow the development of electric, the global warming issue is more important.

 

[PMCErnie]

States are getting annoyed with electric vehicles. They are losing gasoline tax revenue. Look for them to counter with mileage-based road taxes. See what Oregon is doing here:

http://www.roadandtrack.com/car-cul...egon-to-try-uss-first-mileage-based-road-tax/