Luxury car market may never look the same

[Wordman]

From MSNBC, Monday, 28 September 2009:

"The Great Recession may have forever altered demand for high-end brands

...

Compounding the problem, an array of new players are hoping to enter the luxury segment. The recession of the late 1980s provided a perfect opportunity for Toyota and Nissan to move up-market with their Lexus and Infiniti brands, which were priced thousands of dollars less than the traditional German offerings.

Now, Hyundai hopes to do much the same thing.

Best known for cheap-and-cheerful products such as the $10,000 Accent, the South Korean carmaker scored an unexpected success with its Genesis sedan. It was named North American Car of the Year by a panel of 50 U.S. and Canadian auto writers early this year.

Genesis took aim at the BMW 5-Series. Hyundai plans to aim even higher with Equus. Set for debut in 2010, it will target the 7-Series and Mercedes’ own flagship, the S-Class. But like the early Lexus LS400, Hyundai hopes a relatively low $60,000 price tag will grab the attention of today’s more cautious luxury buyer.

For his part, BMW’s O’Donnell downplays the challenge. He insists premium luxury buyers “want more than just product” and factors like heritage and the somewhat intangible head-turning power of a familiar logo also count.

Hyundai is betting heritage is mattering less and less. “Now, there are the diehards who just won’t look at us,” acknowledges Marketing Director Joel Ewanick. “But there are enough others who will (because we’re) offering a value that can’t be ignored.”

..."

Read more at http://www.msnbc.msn.com/id/32860931/ns/business-the_drivers_seat/

 

[GripperDon]

Marketing Director Joel Ewanick. “But there are enough others who will (because we’re) offering a value that can’t be ignored

Unless it rides like a truck.!

 

[gipp]

I remember getting quarterly opinion surveys from Merceds back in the early 90's asking about the "luxury experience". One key question always stood out- "Do you believe that a high performance luxury sedan should require more frequent maintenace than a conventional car?" Remember that Lexus and Infiniti had just hit the market with 100,000 mile tuneups vs. the $4500 30,000 mile Mercedes tradition.
Well we all know what happened. I think the BMW guy needs to reread his history lessons. Customers want value-yes, intrinsics are part of that value equation but only a piece.

 

[Puredeath]

Unless it rides like a truck.!

Amen!

 

[Coug]

My Hyundai dealer treats me no different than an Accent owner -- not good, but not bad (I have the 3.8 Genesis sedan). But I really believe that if the Equus sells for $60,000 as this article says, Hyundai MUST give some special attention to those Owners and re-define the dealer experience for them. This will truly be a premium luxury car, and those prospective buyers are used to special "handling". Some said that about the Genesis as well, but now we're talking about a car that will cost 50% more. Do you think Hyundai can do it?

 

[Sal Collaziano]

Unless it rides like a truck.!

Amen!

Guys! I absolutely KNEW this was going to come back and bite Hyundai in the ass. All the reviewers gushed about how well it handled and how great it was that it rode like a BMW, blah, blah, blah - but when all is said and done, many people feel the Genesis is too stiff.

Hyundai did the right thing, however.. If the Genesis didn't ride the way it did, it would have been forgotten by the media - in fact - forget forgotten - it would have never even been a thought... So Hyundai did the right thing to get the Genesis attention - but now they need to do the right thing and soften things up a bit for the 99.9% of everyone else (non-media).

My Hyundai dealer treats me no different than an Accent owner -- not good, but not bad (I have the 3.8 Genesis sedan). But I really believe that if the Equus sells for $60,000 as this article says, Hyundai MUST give some special attention to those Owners and re-define the dealer experience for them. This will truly be a premium luxury car, and those prospective buyers are used to special "handling". Some said that about the Genesis as well, but now we're talking about a car that will cost 50% more. Do you think Hyundai can do it?

I hear that.. I'm SERIOUSLY considering an Equus for my next vehicle. I even have my wife excited about the idea. But for freak's sake I better not receive crappy service. If I do, it'll be my first and last experience with Hyundai and the entire internet will read about it.

Now onto the article... Thank you for posting it up, Wordman! So BMW is unhappy with it's new 7-Series sales, huh? Well big F'ing surprise, MORONS! The damn thing costs too much money. Not everybody is dumb enough to spend on a car what you can almost buy a HOUSE with. Arrogance. Arrogance. Arrogance. Just like Lexus will soon learn - you cannot price products to the point where hardly anyone can afford them.

It's a good thing most people on this planet lack intelligence. Otherwise none of these car companies would be selling $100,000+ automobiles.

Mercedes gets it. They lowered the price on their new version of the E-Class. I bet they'll follow with price decreases on ALL their popular models.

For some reason, the person who wrote the article forgot to mention the first company who took advantage of the recession of the 80s - Honda/Acura.. And they mentioned pint-sized automobiles like the BMW 1-Series and Audi A3 - but mention the Cadillac ATS in the same sentence. WRONG. The Cadillac ATS is a 3-Series sized vehicle - only a little smaller than the original CTS...

So it's good to see Hyundai coming in to change the game. Lexus, BMW and Mercedes are going to have to come down in pricing if they want to keep selling automobiles. Unfortunately for our domestic automobile companies, that means they'll need to reduce their prices as well...

 

[LLT]

BMW, Lexus and Mercedes have already diluted their brands enough, in my opinion. I see as many BMW 3's as I do Chevy Cobalts. Same with the C and E classes. I really hope they don't lower the prices on the 7 series, S class and LS460 to make them more attainable. They are not the vehicles to play the quantity game with. Skilled tradesmen wet sand by hand every Lexus LS - the interior pieces are made by Yamaha. I can't imagine that if they lowered the price by $10k to increase production that the same level of attention to detail would exist.

Plus, big price reductions would really peeve existing owners such as myself off. Can we say bye-bye to great resale value?

I say - churn out more 3's, ES's and C classes... leave the 7, S and LS alone.

I don't necessarily agree with BMW's stance on brand recognition and "heritage" - but I most definitely agree that many, myself included, want more than just product. I give Hyundai credit for a decent product, but their service and dealer network is a long way from justifying a $60k price tag. I really think they should have waited several more years to spit and polish what they've done with the Genesis. They haven't paid their dues yet and they have a lot of work left to do, IMHO.