Hyundai's Dilemma With The Winged Genesis Badge

[FastDEW1]

While that is true, it certainly is no guarantee of success/greater success.

See all the above examples.

Hyundai has been able to attain the level of sales success w/ the 1G Genesis and now the 2G primarily due to the pricing advantage it has over its competitors (primarily the Japanese).

Going the full, separate lux brand route and the Genesis would lose much, if not all of that pricing advantage and the Genesis sales would probably be more like that for the Q70.

This is making my point to some extent. They are always going to be selling on price because they cannot command a greater price due to perception of being associated with a Hyundai Accent.

 

[FastDEW1]

QFT.


This is where I'm coming from, as well. I'm hearing a lot of theory and speculation about what some merely think Hyundai-Kia are doing or might do, but it's really just that. It's entirely possible we'll still be speculating on this for many years to come. Genesis sales may be doing well based on projections, but in the great sea of public awareness and with so many other brands and perceptions, I'm still seeing that after nearly a decade, very few people know what Genesis is or who makes it. I often can't tell the difference at a glance between the Sedan/Equus and other cars it was designed to look like, and regarding the Coupe, I hear the same thing almost every day: "Nice car! Who makes it??"

Also, I can't help but note the lowered expectations on their faces when I say who. That's unfortunate because the Hyundai brand name is just tainted for too many people, like Yugo, Saturn, Daewoo, or others, including Kia. As I've said, I'm getting tired of having to be a brand ambassador for these cars. How many people really have to constantly explain what a Lexus, Scion, Infinity, or Acura is?? Was there any comparable confusion in the first 5-10 years about those brands? If so, why is Genesis different, and if not, why is Genesis different? For that matter, who has to explain Toyota, Nissan, or Honda?? Don't get me wrong, I'm proud of these cars and what HK has done, but I'd also like to see more separate branding and some actual marketing that establishes the Genesis and Equus as such. Brand perceptions matter, but aren't exactly rational or fair.

I'd also like more definite confirmation of where HK is definitely going in future with these brands. Car blogs, magazines, and discussion forums often sound like dog-wagging based on no real "tails" of evidence

This is again why Hyundai will (eventually) create a distinct luxury brand. They will find out that the top line "halo" cars such as Genesis/Equus do not lift the lower line cars up much. The owners that are shopping for a $30k car will not buy a Hyundai because they sell a $70k car. That works for Mercedes because a guy buying a C Class wants an S Class. But there is a long heritage there. Mercedes started up top and create some more entry level luxury cars which still command a premium compared to their respective class (size) competitors because of Brand.

You cannot drag a brand such as Hyundai up very far (if at all) by creating a halo car which nobody knows or cares about anyway. The path for Hyundai is to improve quality on their mainstreams. If they ever want to make money and be excepted in the premium markets, it will be under a distinct brand.

 

[RN2X]

This is making my point to some extent. They are always going to be selling on price because they cannot command a greater price due to perception of being associated with a Hyundai Accent.

Why would i want to promote a marketing strategy that will lead to them being able to charge me a true fair value for what I am buying? I happen to enjoy getting a 65k car for 45K

 

[FastDEW1]

It sounds to me like this whole "winged badge' dilemma truly IS holding back Hyundai marketing. I mean - Hyundai builds these great cars and nobody associates them with Hyundai. What if the CTS-V was never associated with Cadillac? Or the Escalade? Where would they be now? Probably in the same place Oldsmobile, Pontiac and Saturn are.

Unfortunately, the badge is a very important piece of the car buying and owning puzzle. Perhaps Hyundai should be doing more marketing where they're calling the Genesis, "HYUNDAI Genesis". At least for the time being.

Or how about "Genesis - by Hyundai". That's what Buick did with the Riviera...

Yes, it's a shame and I get the same reaction when I tell people the car they're ogling over is a Hyundai. I expect them to raise their eyebrows and say, "Really?" with encouragement. Instead the opposite happens and they lose all respect for the car. It's very unfortunate...

The key difference is that Cadillac IS a separate and distinct brand. You do not see GM trying to sell you a Chevrolet CTS-V.... Because they have a distinct brand to do that. No confusion at all.

Hyundai is trying (poorly) to do what everyone knows in marketing doesn't work. I do not know who is advising them, but they will eventually be fired and Hyundai will change. It is only time.....

 

[RN2X]

I am probably older than a lot of you guys but my give a shit about what others think factor has long since gone by the wayside. If I tell you my car is a Hyundai and now you are no longer impressed, not my problem, I still get to drive a VERY nice ride knowing it is a comparable car to several 60 and 70k automobiles out there. What others think does not change my pleasure of ownership.

 

[FastDEW1]

Even if it was a separate brand, as soon as people find out it is made by Hyundai, I don't think the reaction is going to be any better than if it is called a Hyundai Genesis.

Everyone knows that Lexus is owned by Toyota, but Toyota had a very good reputation for reliability when the Lexus brand was started. Same with Honda/Acura.

You would be surprised how many average car buyers do not know that Lexus is made by Toyota, that Nissan makes Infinity, that Honda makes Acura, etc, etc.

There is a lot of badge engineering as well. There are people who in car surveys will rate a Toyota Matrix a good car and a Pontiac Vibe a poor car, not knowing they were made on the same line.

In studies - greater than 20% of the US car buying public has stated they would buy a Chinese car. They even said "who knows, my car now may be made in China". So you cannot expect that the average buyer knows what you know.

 

[ckon]

why would i want to promote a marketing strategy that will lead to them being able to charge me a true fair value for what i am buying? I happen to enjoy getting a 65k car for 45k

amen!

 

[FastDEW1]

Why would i want to promote a marketing strategy that will lead to them being able to charge me a true fair value for what I am buying? I happen to enjoy getting a 65k car for 45K

I'm a business owner. And as a business owner I don't like discounting my product by 30% to sell it. I won't be in that business very long. Same goes for Hyundai. They won't sell these cars at huge discount for forever. They can't. It's not good business. So they either stop making them or figure out a way to charge what it's worth for them to make them. The discussion isn't about what I like to pay for a car. It's about what makes sense to a business.

Also - it's all relative anyway. The depreciation on an Equus is crazy. You pay less when new because of massive discounts. You then sell for less when used. Because of massive discounts.

 

[FastDEW1]

I am probably older than a lot of you guys but my give a shit about what others think factor has long since gone by the wayside. If I tell you my car is a Hyundai and now you are no longer impressed, not my problem, I still get to drive a VERY nice ride knowing it is a comparable car to several 60 and 70k automobiles out there. What others think does not change my pleasure of ownership.

I agree on this. But my points have all been made from what Hyundai will eventually have to do. Your pleasure of owning doesn't change. But Hyundai's "pleasure" of selling you a product they needed to discount 30% to get it sold makes it bad business. In fact the heavy discounts on their halo cars will cause people to perceive the need for heavy discounts on their mainline cars. It's bad business.

 

[Mark_888]

I am probably older than a lot of you guys but my give a shit about what others think factor has long since gone by the wayside. If I tell you my car is a Hyundai and now you are no longer impressed, not my problem, I still get to drive a VERY nice ride knowing it is a comparable car to several 60 and 70k automobiles out there. What others think does not change my pleasure of ownership.

This is especially true since you would have to pay a minimum of $5K more for the privilege of buying a Genesis that was a separate brand sold at a separate dealership.

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[Mark_888]

You would be surprised how many average car buyers do not know that Lexus is made by Toyota, that Nissan makes Infinity, that Honda makes Acura, etc, etc.

I would not be surprised, since I know that a lot of people don't know that New Mexico is part of the United States (we could go on indefinitely about the ignorance of the average person).

But when Lexus and Acura first started, they definitely got off to a good start due to the good reputation of Toyota and Honda.

 

[PMCErnie]

Why would i want to promote a marketing strategy that will lead to them being able to charge me a true fair value for what I am buying? I happen to enjoy getting a 65k car for 45K

Exactly. Let the uninformed unwashed buy the RR and MB.

 

[Top Gear]

Hey Mark, did you see this picture? Did you miss the obvious yet again, dude? Did you see these twin buildings on their current website? Pretty much says it all. I don't know how many times I have to explain to you that percentages and partnerships and dealer networks mean very little in the business world in terms of finality, because they can do whatever they want in terms of marketing. Again, take a look around your own car, buddy. When you see Kia logos all over it, then tell me about it only being a one-way percentage of ownership.

http://www.hyundaimotorgroup.com/About-Us/Philosophy.hub

I think there's a subtlety lost here. The Hyundai brand being "damaged" in so many people's eyes is not final, and obviously sales demonstrate that the brand "has come a long way", as people often say to me. Hyundai has been greatly helped by the better cars themselves, such as the Elantra, Sonata, Veloster etc, and it has been helped by the association with Kia, which has put out slightly sexier cars (if a few questionable design choices), and it has been helped by the entry of respected Genesis Sedan/Coupe and Equus.

However, one point here is this brand rehabilitation was not helped by endless speculation and fence-sitting about the Genesis and Equus. It would have been helped so much more if Genesis were launched separately, or even if it merely appeared to be separate. For those who did not know or have to know about the association, they could simply develop a brand perception about Genesis. For those who knew about the association it would help them see that, whatever they thought about past cars, it's no longer true today. It's called marketing and merchandising, and HK just has been hit and miss on these aspects of the global market.

The upshot is that yes, the brand has been rehabilitated for some, but probably not for a majority. The fallout has meant that Genesis and Equus buyers have to feel like the ugly step-children, not just for one or two years, mind you, but for over seven years and counting. HK needs to put out less Hyundai-Kia cars that look pretty much the same and point at the same buyer (didn't they learn anything from GM, Chrysler and Ford??) and give some attention to the Genesis and Equus as proper brands, or merge them into a new Genesis launch. We can go around and around chest-beating about irrelevant factoids, but that is the nub.

Genesis needs to be separate, and no excuse really passes muster.

 

[Mark_888]

Hey Mark, did you see this picture? Did you miss the obvious yet again, dude? Did you see these twin buildings on their current website? Pretty much says it all.

As I previously mentioned, Hyundai initially bought a 51% interest in Kia in 1998. Therefore they controlled Kia Motors for quite a while, and the parent company of Hyundai and Kia was called Hyundai-Kia Motor Group. During that time, it is safe to assume that they operated more or less as one company. I think it is also safe to assume that those buildings date back to that time.

More recently, Hyundai has lowered its ownership of Kia to about 33%, and renamed the parent company of Hyundai to Hyundai Motor Group. So they no longer completely control what Kia does. In response to a question, John Krafcik, former CEO of Hyundai Motor America stated that he had no contact or coordination with Kia Motors America during his time with Hyundai.

I don't know if the change in ownership was dictated by the government, since Hyundai and Kia together complete dominate the Korean domestic auto market. Obviously, such an overwhelming domination by one company would have never been allowed in the USA in the first place.

So things change.

 

[Top Gear]

So things change.

Thank you for finally agreeing with the obvious concept. Business relationships can change, which only underlines the marketing relationships message several of us are saying.

 

[Huddleston]

all this talk about badges.... I took both the front and rear badging off and am not replacing it.

badges... we don't need no stinkin' badges....

 

[YEH]

This is making my point to some extent. They are always going to be selling on price because they cannot command a greater price due to perception of being associated with a Hyundai Accent.

How is that making YOUR point?

The Genesis is the 3rd best selling midsize, lux sedan in the US and the 2nd in Canada (even outselling the 5 Series).

That would NOT be the case if Genesis had been spun off to a separate luxury brand/dealer network and priced alongside the GS and Q70.

And for all the prestige of Lexus and Infiniti (which many still misspell as Infinity despite a quarter of a century, Akio Toyoda had to be talked out of cancelling the GS and Ghosn seriously contemplated doing away with the entire Infiniti brand altogether.

Throw in the abysmal RLX sales - and having a luxury brand hasn't exactly helped the Japanese selling higher end luxury models.

The key difference is that Cadillac IS a separate and distinct brand. You do not see GM trying to sell you a Chevrolet CTS-V.... Because they have a distinct brand to do that. No confusion at all.

GM seems to be having great success with something called the Corvette (esp. the C7), sold by Chevy.

Just b/c something hasn't been done, doesn't mean that it can't be done.

More and more buyers are getting used to the notion of non-luxury branded autos.

I'm a business owner. And as a business owner I don't like discounting my product by 30% to sell it. I won't be in that business very long. Same goes for Hyundai. They won't sell these cars at huge discount for forever. They can't. It's not good business. So they either stop making them or figure out a way to charge what it's worth for them to make them. The discussion isn't about what I like to pay for a car. It's about what makes sense to a business.

I agree on this. But my points have all been made from what Hyundai will eventually have to do. Your pleasure of owning doesn't change. But Hyundai's "pleasure" of selling you a product they needed to discount 30% to get it sold makes it bad business. In fact the heavy discounts on their halo cars will cause people to perceive the need for heavy discounts on their mainline cars. It's bad business.

And as a And as a business owner, you are looking at it in the wrong way.

Hyundai is able to sell the Genesis at a lower price-point b/c they don't have to price-in the cost of a separate lux brand, dealer network and everything that goes along w/ that.

Costco sells diamond jewelry, including items that are over $100k+.

Sure, you don't get that fancy blue Tiffany's box or the store ambiance, but at the same time, I'll take not having to overpay for such things for the same quality of diamond.

Again, look at the track history of the Japanese lux brands.

1. Infiniti had long stop selling its Q flagship, sales of the M/Q70 have been horrible and Ghosn seriously thought of killing the marque (basically, only kept alive due to alliance w/ Daimler where Infiniti gets to use various MB powertrains and platforms and hence sharply cut development costs).

2. Acura sedan sales falling - even as they basically rejiggered their sedan lineup so that it is cheaper (instead of TSX, TL and RL; now ILX, TLX and RLX) with RLX sales being abysmal.

With the TLX, Acura basically dropped almost $10k in starting price from the TL.

Meanwhile, Hyundai has increased the price of the Genesis from $32.5k for the 1G Genesis (1st yr) to $38k presently and likely to be somewhere in the low $40k range for the 3G model.

3. As stated, Toyoda had to be talked out of canceling the GS - what luxury auto brand would kill of its midsize RWD sedan (the heart of the luxury sedan market when it comes to price and sales volume) if it wants to be taken seriously?

And let's remember the Lexus flagship was sharply discounted when its 1st launched (the MSRP of the LS400 upon launch was $35k - which was less than a well-equipped E Class at that time).

Since that time, Lexus has increased the price of the LS, but it is still a value compared to the 7 Series (comparably equipped), nevermind the S Class.

But despite still being the value and w/ a luxury marque behind it, LS sales continue to fall (on track to sell 7,400 for the yr when the LS used to regularly sell 25-30k a yr).

The pricier 7 Series is on track to sell over 10k this yr and that's w/ 6 Series GC sales stealing some 7 Series sales.

Compare mid-price/flagship sedans sales for Lexus vs. MB and BMW - not even close (and Infiniti is not even on the radar).

For all the talk about the strength of the Lexus brand - Lexus relies heavily on its cheaper FWD models, the RX, ES and NX for sales (not to mention its basically rebadged BOF SUVs).

If Hyundai went w/ a separate luxury brand at this time and priced its sedans like the lux RWD Japanese, would see the same fate (and w/ that, being more similar to Infiniti than Lexus).

In addition, what is much more vital for Hyundai in the luxury game right now is product, product, product.

Getting 1, if not 2 luxury CUVs quickly to market is vital, not to mention a compact sport sedan.

But if Hyundai has to spend its limited resources on launching and building out a new luxury brand, it has less $$ to spend on product development.

The better way of doing things would be to expand the luxury lineup - which would be better able to support a luxury brand and launch one (or a sub-brand) at that time.

 

[FastDEW1]

I appreciate your thoughts. Nice to have good discussion and critical thinking - even if we disagree on several points. With that said - I can't really add much more to this discussion because all view points seem to have already been drawn for the most part. And I would really like to get back to just talking about the cars themselves.

All my best!

 

[RickyBobby]

How is that making YOUR point?

The Genesis is the 3rd best selling midsize, lux sedan in the US and the 2nd in Canada (even outselling the 5 Series).

That would NOT be the case if Genesis had been spun off to a separate luxury brand/dealer network and priced alongside the GS and Q70.

And for all the prestige of Lexus and Infiniti (which many still misspell as Infinity despite a quarter of a century, Akio Toyoda had to be talked out of cancelling the GS and Ghosn seriously contemplated doing away with the entire Infiniti brand altogether.

Throw in the abysmal RLX sales - and having a luxury brand hasn't exactly helped the Japanese selling higher end luxury models.




GM seems to be having great success with something called the Corvette (esp. the C7), sold by Chevy.

Just b/c something hasn't been done, doesn't mean that it can't be done.

More and more buyers are getting used to the notion of non-luxury branded autos.









And as a And as a business owner, you are looking at it in the wrong way.

Hyundai is able to sell the Genesis at a lower price-point b/c they don't have to price-in the cost of a separate lux brand, dealer network and everything that goes along w/ that.

Costco sells diamond jewelry, including items that are over $100k+.

Sure, you don't get that fancy blue Tiffany's box or the store ambiance, but at the same time, I'll take not having to overpay for such things for the same quality of diamond.

Again, look at the track history of the Japanese lux brands.

1. Infiniti had long stop selling its Q flagship, sales of the M/Q70 have been horrible and Ghosn seriously thought of killing the marque (basically, only kept alive due to alliance w/ Daimler where Infiniti gets to use various MB powertrains and platforms and hence sharply cut development costs).

2. Acura sedan sales falling - even as they basically rejiggered their sedan lineup so that it is cheaper (instead of TSX, TL and RL; now ILX, TLX and RLX) with RLX sales being abysmal.

With the TLX, Acura basically dropped almost $10k in starting price from the TL.

Meanwhile, Hyundai has increased the price of the Genesis from $32.5k for the 1G Genesis (1st yr) to $38k presently and likely to be somewhere in the low $40k range for the 3G model.

3. As stated, Toyoda had to be talked out of canceling the GS - what luxury auto brand would kill of its midsize RWD sedan (the heart of the luxury sedan market when it comes to price and sales volume) if it wants to be taken seriously?

And let's remember the Lexus flagship was sharply discounted when its 1st launched (the MSRP of the LS400 upon launch was $35k - which was less than a well-equipped E Class at that time).

Since that time, Lexus has increased the price of the LS, but it is still a value compared to the 7 Series (comparably equipped), nevermind the S Class.

But despite still being the value and w/ a luxury marque behind it, LS sales continue to fall (on track to sell 7,400 for the yr when the LS used to regularly sell 25-30k a yr).

The pricier 7 Series is on track to sell over 10k this yr and that's w/ 6 Series GC sales stealing some 7 Series sales.

Compare mid-price/flagship sedans sales for Lexus vs. MB and BMW - not even close (and Infiniti is not even on the radar).

For all the talk about the strength of the Lexus brand - Lexus relies heavily on its cheaper FWD models, the RX, ES and NX for sales (not to mention its basically rebadged BOF SUVs).

If Hyundai went w/ a separate luxury brand at this time and priced its sedans like the lux RWD Japanese, would see the same fate (and w/ that, being more similar to Infiniti than Lexus).

In addition, what is much more vital for Hyundai in the luxury game right now is product, product, product.

Getting 1, if not 2 luxury CUVs quickly to market is vital, not to mention a compact sport sedan.

But if Hyundai has to spend its limited resources on launching and building out a new luxury brand, it has less $$ to spend on product development.

The better way of doing things would be to expand the luxury lineup - which would be better able to support a luxury brand and launch one (or a sub-brand) at that time.

Possibly the worst car analysis written on the internet. Not one link to back anything up.

This is all your OPINION and with no credibility its just hot air.Sorry.

 

[thompithak3182]

my little 2 cents in this, i skimmed through some post on this. i was just looking at jd power and in their testing hyundai is one of the worse dependable cars for 2015 having 188 issues with every 100 cars tested. http://www.jdpower.com/press-releases/2015-vehicle-dependability-study
but jd power had good initial quality test top 5 best. i would say that those folks you talk to that didnt know it was a hyundai and then you tell them im thinking they are thinking that they are not dependable cars. its hard for me to put into words but i hope yall know what im saying. i think rebranding the genesis might help a lil bit. plus if you take out the h on the trunk more people would ask what that is.