Hyundai Quickly Moves Upmarket, Demands Higher Prices

March 26th, 2013
2014 Hyundai Equus

2014 Hyundai Equus

Aside from the headline giving it away, if I asked which automaker is currently at production capacity, sells every car it builds, gets nearly MSRP on each sale and is bringing a salvo of upmarket new vehicles into showrooms, I doubt Hyundai would be the first carmaker to come to mind.

The Korean automaker, though, is putting on a school on how to build cars and market them to a hungry American audience. The business model has evolved from its cheap-price and long-warranty roots to a more upscale, quality-based model.

Two new vehicles represent the new direction of this company, while used models still represent some of the best values available.

At next week’s New York Auto Show, Hyundai will show off its updated luxury sedan, the 2014 Equus. The big sedan will compete with high-end makes, such as the Mercedes-Benz S-Class and BMW 7 Series. With options, it’ll crest the $70,000 mark. It’ll sell, too, because it offers all the luxury the big boys do at a lower cost. Driving dynamics are still not up to 7 Series standards, but for many buyers that just doesn’t matter.

There’s also a new 3-row 7-passenger CUV hitting showrooms, which replaces the Veracruz but will wear the Santa Fe name. Taking a cue from Land Rover, the smaller CUV previously known as the Sante Fe will be called the Santa Fe Sport. Confusing, perhaps, but I’m guessing consumers won’t care. What consumers will care about is their ability to take a Hyundai home, which will require paying nearly sticker price, because the company is running production at capacity. Dealers report an average of 42 days of stock, while industry average is closer to 65. When cars are scarce, prices stay high.

Don’t expect Hyundai to launch into new factories to increase production right away, either. NBC News interviewed Hyundai Motor America CEO John Krafcik and said,

Hyundai has learned from watching competitors’ mistakes, especially when it comes to overstocking. The goal, Krafcik says, is to follow the strategy of the most successful luxury brands, and ‘always be one car short of demand.'”

To get a great deal on a Hyundai these days, buyers should start with the CarGurus used listings. Resale values are still not at levels enjoyed by Toyota and Honda, so great deals can be found on late-model cars. If things continue down this path of growth, though, used Hyundais could soon be on the same level as used Hondas.

Would you pay MSRP for a new Hyundai? Plenty of Americans are!

-tgriffith

Find Used Cars in Your Area at CarGurus

Used Mercedes-Benz S-Class
Used BMW 7 Series
Used Hyundai Equus
Used Hyundai Santa Fe
Used Hyundai Veracruz

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  1. Randy
    March 26th, 2013 at 18:34 | #1

    You used the right word, “value.” Although I doubt anything they can make is actually a good value at $70K, Hyundai and Kia have carved a solid niche by offering good value. The Kia Soul is a good example. It compares well with the Honda CRV and Toyota Rav-4, at a fraction of the price. And Hyundai offers some sporty looking models that actually look sharper than more conservative competitors models, with better equipment at a lower price. Value consideration goes out the window, though, because buyers rarely get real value for the extra money. I, for one, would certainly not pay that much for brand like Hyunda when I could get a Jag, Audi, BMW or Merc.

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