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Can Hyundai be a U.S. luxury car?
Checking out the Equus, Hyundai's new premium sedan
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TEXT OF STORY
Steve Chiotakis: Hyundai's eyeing some deep pockets with its new entry this summer, the Equus. As Marketplace's Jeremy Hobson reports, the Korean carmaker's motivations are going far beyond the luxury car customer.
Jeremy Hobson: Hyundai may be one of the world's largest automakers, but:
Alexandar Edwards: Here in the U.S., there are many folks that look at Hyundai and see that as a low-end product.
That's Alexander Edwards, who heads the automotive section at Strategic Vision. He says at more than $70,000 a pop, the Equus will compete with luxury cars made by Mercedes and BMW.
Jeff Schuster at JD Power and Associates says Hyundai's hope is that the Equus will lift the entire brand's image.
Jeff Schuster: It's really looking at moving from what really has been perceived as the economic choice in the various segments that they've been playing in, which tended to really focus on the small basic cars.
The Equus has been selling in overseas markets for years. But Alexander Edwards says attracting a high-end U.S. consumer won't be easy, because a lot of the buying decision comes down to prestige.
Edwards: When I get in this vehicle, am I going to be James Bond? Am I going to be Batman? Is it going to be able to magically transform me into that ideal self I have in a luxury vehicle?
Hyundai's been building up to this point in the U.S. with rollouts of increasingly fancy automobiles like the Genesis and the Santa Fe. The question, Edwards says, is can it gild its image without alienating its low-end consumer base?
In New York, I'm Jeremy Hobson for Marketplace.
About the author
Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead. Follow Jeremy on Twitter @jeremyhobson
I'm a South Africa, and you guys wont believe it but even in South Africa, which is a third world country Hyundai is considered a terrible car. And I'm sorry but no matter what Hyundai tells me I wont believe them ever being capable to to compete with the likes of BMW,Mercedes or lexus. I'll rather stick to my tried and tested Toyota's....
Gene,
Well it's still a matter of one of you is grossly misinformed. See http://www.corporateregister.com/a10723/hmc08-sus-sk.pdf
On page 69, the company clearly claims to use electro-coating at their Ulsan plant.
Also, see: http://www.durr.com/fileadmin/user_upload/pas_psi/en/pdf/Duerr_Roh-Dip4_...
This company claims to have installed a system similar to Montgomery in Kia's Slovakia plant, where some Hyundais are made.
Also see: http://www.oppapers.com/essays/Assembly-Line-Hyundai-India/162180
Not sure who wrote this, but they claim that Hyundai's India plant uses a similar process.
Lastly I'd note that Hyundai's rust-through warranty is seven years versus six for GM and five for Toyota, Ford, and Honda.
This just isn't adding up.
Derrick,
It's not the SUV's built in Alabama. It's the cars built in Korea that are skimping on corrosion. I got the information from family members and professional associates who work at other car companies where they reverse-engineered some of the cars to find out where they're finding cost avoidance.
There is a lot of misinformation in this article. First of all, the "Santa Fe" is not "fancy". Mr. Hobson meant to say, "Veracruz". Second, the Hyundai Equus is NOT going to start ANYWHERE near $70k. This is the same incorrect information being regurgitated on every automotive blog in the United States. The v6 will most likely start somewhere in the mid to high $40s and the V8 will start in the low to mid $50s. That's a FAR cry from where the Lexus LS460, Mercedes S550 or BMW 750i start...
Sal Collaziano
http://www.genesisowners.com
P.S. Furthermore, the Equus will be sold under the "Genesis" brand name in 2015, along with the redesigned Genesis sedan and V8 Genesis Coupe.
Gene, you're right. I find it very hard to believe you. Either your or Hyundai is telling a lie. From http://www.hyundaiusa.com/abouthyundai/ourcompany/know.aspx
"Did you know?...Our cars take a primer and electricity bath?
We roll our car bodies through a paint primer bath 11 times. While it’s electrically charged. The bath and body have opposite charges, so that the bath is drawn to the body like a magnet, ensuring thorough coverage in all the little nooks and crannies, and ensuring a new level of corrosion protection." Why would I ask GM or Honda this anyway? Who is your source for this? I think either you or Hyundai, depending on who's lying, needs legal action taken against you.
I know and work with quite a few people in the US auto industry, and I happen to know that Hyundai has some quality control tricks that they play to keep the price of their cars down.
For example, did you know that most new Hyundais have no E-coat under the paint? Saves a $1000 or more per car but wait until that rust starts. Hyundai is even offering premiums in trade and scrapping the trade-ins hoping to delay when people finally notice.
If you don't believe me, ask anyone who works in Auto painting, or better yet, call Honda or GM.
Dear Marketplace:
I was elated to hear that the Equus was coming to America! Although I am not in the market for a high-end automobile of any nationality, I remember well the original debut of the Equus in Seoul, where I had just begun working for a Korean law firm. It was 1999, and the Asian currency collapse (locally aka as "the IMF crisis") was still fresh in peoples' minds. The introduction of a luxury car during a period of such extreme economic stress was ridiculed to no end, held up as an example of all that was wrong with the Korean chaebol system.
Hyundai's timing proved to be impeccable. The economy was just starting to swing back up, and soon there were Equuses (Equines?) everywhere in Seoul. I only hope that the arrival of the Equus in the U.S. will again prove to be like that of robins in a early spring cold snap, a harbinger of better times just around the corner.
