Hyundai Genesis Beats Lexus 350

[RX350lover]

Check out Consumer Reports November 2011 issue (latest issue). Also in the same issue, they evaluated tires for SUV (very interesting) and car batteries.

http://www.consumerreports.org/cro/magazine-archive/2011/november/cars/upscale-sedans/overview/index.htm

(Link added as per suggestion)

[LexBob2]

The Genesis has been their top ranked upscale sedan for a while. In their road test it scored 92 points and the ES350 91 points.

When I bought my 2010 ES I looked at the Genesis, but didn't pull the trigger on it.

[pj8708]

This discussion re the Genesis has come up several times before, and several members have compared the ES350 and the Genesis. A quick search of the forum will find the threads regarding this topic.

A link to your article in Consumer Reports would make it easier for us to read your relevant article.

[LexBob2]

As a side note, in the CR issue the Predicted Reliability of the Genesis is Good and the ES350 is Excellent.

[SW03ES]

No surprise. I've said several times that I extensively compared the ES350 and the Genesis. The Genesis is without a doubt more car for the money. For what a UL ES350 costs you can have a loaded V8RWD Genesis thats bigger, has better performance obviously, and has more features.

What it does not have, and ultimately what made me go for the Lexus is Lexus reputation, prestige, ownership experience or projected resale value. I leased the Lexus for business, and the lease payments on a Genesis were $120 a month more because of the very poor residual value at the end of the lease. I think thats the achilles heel of Hyundai's plan for this car and the Equus. People will spend for a used Lexus because its a Lexus. The Genesis may be an awesome car, but 3-4 years down the line which one is someone going to be more interested on the pre-owned lot? A luxury car purchase is not just about the physical car itself, buyers are buying into a lifestyle and things like the dealer experience, ownership experience, and ultimately what their friends at the office and country club think when they roll up in it. Hyundai just doesn't deliver there.

We saw a loaded Equus at a mall yesterday, a huge value no doubt optioned like a loaded $85k LS460L for $65k. BUT, if the vehicle is leased (a LOT of them are) then the payments are actually the same because of the Equus' poor residual value. Plus...if you're already spending $65k, I'd rather get a lowly LS460 SWB for the same money.

On top of that, as the economy improves, consumption is getting cool again. There for a while in '08 and '09, it was cool to fly under the radar but you're seeing that shift away.

So, ultimately I'm not as bullish on Hyundai's success with this luxury experiment as I was a couple years ago.

[LEXIRX330]

No surprise. I've said several times that I extensively compared the ES350 and the Genesis. The Genesis is without a doubt more car for the money. For what a UL ES350 costs you can have a loaded V8RWD Genesis thats bigger, has better performance obviously, and has more features.

What it does not have, and ultimately what made me go for the Lexus is Lexus reputation, prestige, ownership experience or projected resale value. I leased the Lexus for business, and the lease payments on a Genesis were $120 a month more because of the very poor residual value at the end of the lease. I think thats the achilles heel of Hyundai's plan for this car and the Equus. People will spend for a used Lexus because its a Lexus. The Genesis may be an awesome car, but 3-4 years down the line which one is someone going to be more interested on the pre-owned lot? A luxury car purchase is not just about the physical car itself, buyers are buying into a lifestyle and things like the dealer experience, ownership experience, and ultimately what their friends at the office and country club think when they roll up in it. Hyundai just doesn't deliver there.

We saw a loaded Equus at a mall yesterday, a huge value no doubt optioned like a loaded $85k LS460L for $65k. BUT, if the vehicle is leased (a LOT of them are) then the payments are actually the same because of the Equus' poor residual value. Plus...if you're already spending $65k, I'd rather get a lowly LS460 SWB for the same money.

On top of that, as the economy improves, consumption is getting cool again. There for a while in '08 and '09, it was cool to fly under the radar but you're seeing that shift away.

So, ultimately I'm not as bullish on Hyundai's success with this luxury experiment as I was a couple years ago.

Yea SW I agree I think in order for Hyundai to be successful in the luxury car market they need to spin off a luxury line. Same as Toyota and Lexus, no matter how nice the car is it is still at the end of a day a Hyundai and that is the problem IMHO.

[1990LS400]

Yea SW I agree I think in order for Hyundai to be successful in the luxury car market they need to spin off a luxury line. Same as Toyota and Lexus, no matter how nice the car is it is still at the end of a day a Hyundai and that is the problem IMHO.

Lexus was considered a complete joke (Thank you, Jay Leno) when my next door neighbor bought an LS400 the first week they were on sale in 1989 and Lexus was not faring much better when I bought my LS400 a few months later in early 1990. Did my next door neighbor and I care what other people thought? No. And, by the way, the only car that saved Hyundai from being the most unreliable cars sold in the U.S. in 1990 was the Yugo. Hmmm ... and now Hyundai is near the top of the heap in reliability ratings.

I got a great deal on my cheap "joke" 1990 LS400 and I laughed about it for 13 1/2 years. Now I'm very much looking forward to buying a low mileage two or three year old off-lease "joke" Hyundai V8 Genesis or Equus in 2004 or 2005.

Maybe the late Steve Jobs said it best even if he didn't know an adjective from an adverb: "Think Different"

[pj8708]

No surprise. I've said several times that I extensively compared the ES350 and the Genesis. The Genesis is without a doubt more car for the money. For what a UL ES350 costs you can have a loaded V8RWD Genesis thats bigger, has better performance obviously, and has more features.

What it does not have, and ultimately what made me go for the Lexus is Lexus reputation, prestige, ownership experience or projected resale value. I leased the Lexus for business, and the lease payments on a Genesis were $120 a month more because of the very poor residual value at the end of the lease. I think thats the achilles heel of Hyundai's plan for this car and the Equus. People will spend for a used Lexus because its a Lexus. The Genesis may be an awesome car, but 3-4 years down the line which one is someone going to be more interested on the pre-owned lot? A luxury car purchase is not just about the physical car itself, buyers are buying into a lifestyle and things like the dealer experience, ownership experience, and ultimately what their friends at the office and country club think when they roll up in it. Hyundai just doesn't deliver there.

We saw a loaded Equus at a mall yesterday, a huge value no doubt optioned like a loaded $85k LS460L for $65k. BUT, if the vehicle is leased (a LOT of them are) then the payments are actually the same because of the Equus' poor residual value. Plus...if you're already spending $65k, I'd rather get a lowly LS460 SWB for the same money.

On top of that, as the economy improves, consumption is getting cool again. There for a while in '08 and '09, it was cool to fly under the radar but you're seeing that shift away.

So, ultimately I'm not as bullish on Hyundai's success with this luxury experiment as I was a couple years ago.

Yea SW I agree I think in order for Hyundai to be successful in the luxury car market they need to spin off a luxury line. Same as Toyota and Lexus, no matter how nice the car is it is still at the end of a day a Hyundai and that is the problem IMHO.

Not to get off track, but this is a really well written post Steve...sums up the market very well.

[SW03ES]

The LS400 was a different situation though, they had a brand to market and they were able to provide world class customer service that turned heads and got them noticed. Once they could associate prestige to the brand, and they were able to do that fairly quickly it took off. Lexus was able to use the initial incredible value of the car, coupled with a dealer and ownership experience that buyers could not get from anybody else, to great success.

Because there is no specific marketing division and brand for the Equus and Genesis, Hyundai doesn't have the ability to do that. I don't think anybody is saying these cars are a joke, if anything they get good reviews and such, but they aren't connecting to the sales success Hyundai is looking for, and the reason for that in my opinion is that they have no brand, and America is VERY brand conscious.

People saw the LS400 in 1990 and they were able to say "Hey, thats one of those new Lexus things right". People see the Genesis and they have no idea what it is...they actually sell the foreign Genesis emblem to people and people buy the emblems and whole new airbag covers because they are ashamed of the Hyundai logo. How to you build brand recognition when people are doing things like that?

You won't see Hyundai becoming the biggest luxury automaker in the US as Lexus did, when they are also selling $8,000 Hyundai Elantras. Would Lexus have been as successful in the US if the LS400 had been a Toyota? I don't believe so. You have people, like you Jim that don't care about the brand image...but you are not the typical consumer.

[rob_es350]

The LS400 was a different situation though, they had a brand to market and they were able to provide world class customer service that turned heads and got them noticed. Once they could associate prestige to the brand, and they were able to do that fairly quickly it took off. Lexus was able to use the initial incredible value of the car, coupled with a dealer and ownership experience that buyers could not get from anybody else, to great success.

Because there is no specific marketing division and brand for the Equus and Genesis, Hyundai doesn't have the ability to do that. I don't think anybody is saying these cars are a joke, if anything they get good reviews and such, but they aren't connecting to the sales success Hyundai is looking for, and the reason for that in my opinion is that they have no brand, and America is VERY brand conscious.

People saw the LS400 in 1990 and they were able to say "Hey, thats one of those new Lexus things right". People see the Genesis and they have no idea what it is...they actually sell the foreign Genesis emblem to people and people buy the emblems and whole new airbag covers because they are ashamed of the Hyundai logo. How to you build brand recognition when people are doing things like that?

You won't see Hyundai becoming the biggest luxury automaker in the US as Lexus did, when they are also selling $8,000 Hyundai Elantras. Would Lexus have been as successful in the US if the LS400 had been a Toyota? I don't believe so. You have people, like you Jim that don't care about the brand image...but you are not the typical consumer.

agree that brand is huge and hyundai has more than a tad of catching up to accomplish, but look, they have made enormous progress

the name hyundai used to only be used as the punchline of a joke, and we all know that is not the case anymore..especially on the lower end..the sonata has taken share from them all

lexus and the others better watch their backs as hyundai will likely continue to get strong reviews, and increase share in the more expensive markets

[SW03ES]

agree that brand is huge and hyundai has more than a tad of catching up to accomplish, but look, they have made enormous progress

the name hyundai used to only be used as the punchline of a joke, and we all know that is not the case anymore..especially on the lower end..the sonata has taken share from them all

lexus and the others better watch their backs as hyundai will likely continue to get strong reviews, and increase share in the more expensive markets

I'm the first person to sing their praises, I know they've come a long way and truly I would buy a lot of their models over similar Toyota models.

BUT, being seen as a equal to Toyota and Honda is a completely different thing than being seen as a luxury marque. It will never be considered an equal to Lexus, BMW, Mercedes Benz, etc as long as they are branded alongside an $8,000 Elantra. No mater how incredible the cars are. In the US they need a brand to build prestige with.

[LEXIRX330]

BUT, being seen as a equal to Toyota and Honda is a completely different thing than being seen as a luxury marque. It will never be considered an equal to Lexus, BMW, Mercedes Benz, etc as long as they are branded alongside an $8,000 Elantra. No mater how incredible the cars are. In the US they need a brand to build prestige with.

That's exactly what I was saying...not that Hyundai cars are a joke...

[1990LS400]

If my forecast of the U.S. economic environment for the next 20 years is correct, not having additional distribution channels for its more expensive vehicles could be a benefit for Hyundai.

And if Mercedes dealers like the one a couple of miles from my home can display $12,000 Smart cars a few feet from $200,000+ S65 sedans, I don't think it is going to be a problem for Hyundai to do something similar.

The world is changing in ways 99.999% of people don't understand. Sometimes I wish I didn't understand. Ignorance is bliss!

[gatoman39]

I am both a '95 LS owner and a 09 Genesis V8 owner. While I agree perception wise, Hyundai has a bit of a ways to be used in the same sentence as Lexus; in terms of execution, Toyota should be concerned.

[rob_es350]

If my forecast of the U.S. economic environment for the next 20 years is correct, not having additional distribution channels for its more expensive vehicles could be a benefit for Hyundai.

And if Mercedes dealers like the one a couple of miles from my home can display $12,000 Smart cars a few feet from $200,000+ S65 sedans, I don't think it is going to be a problem for Hyundai to do something similar.

The world is changing in ways 99.999% of people don't understand. Sometimes I wish I didn't understand. Ignorance is bliss!

if you are talking about the continuing decline of the American economy as the more developing countries move up, I am part of the .001% of the people that understand, agree with you, and do not see how this trend can be reversed..very scary

I am reading into your words correctly, or you are thinking something else?

[1990LS400]

if you are talking about the continuing decline of the American economy as the more developing countries move up, I am part of the .001% of the people that understand, agree with you, and do not see how this trend can be reversed..very scary

I am reading into your words correctly, or you are thinking something else?

No, you've got it. It's just going to be, and already is, difficult for those who do not understand and who have not prepared.

[LexBob2]

Last year Car & Driver did a comparo of upscale V6 sedans and the order of finish was: 1. Genesis 2. ES350 3. LaCrosse 4. Taurus. In this one the gap between the Genesis and ES350 was close and the pros and cons of both cars were close to Consumer Reports.

As with any of these reviews/comparisions, I like to read them and then make my own decision based on factors that are important to me. They do make for interesting reading and discussions though.

[pj8708]

What I find fascinating about this topic, is the almost impossible task Hyundai and Lexus have to do. That is to overcome their owners persistent doubts.

This thread is comprised of people who are by any definition, committed, engaged, and enthused about their automobiles. Just the act of taking the step to join an owners group says they are a true enthusiast. Yet, as you read over the various post throughout the site from time to time there are owners who seem to have a love-hate relationship with Lexus or with their Lexus car. I have wondered from time to time why, especially in those instances when the owner is chronically negative, they continue to post on the board instead of trading in their car.

Is the Lexus brand better than Hyundai, or is the Genesis better than the ES. I don't know, but in the case of some of you who are long time Lexus owners, what would be your motivation for leaving the Lexus brand. Specifically, if you are in a position of trading cars, you've owned Lexus before, what would be the top three reasons you would buy the Hyundai or a another brand?

[SW03ES]

If my forecast of the U.S. economic environment for the next 20 years is correct, not having additional distribution channels for its more expensive vehicles could be a benefit for Hyundai.

And if Mercedes dealers like the one a couple of miles from my home can display $12,000 Smart cars a few feet from $200,000+ S65 sedans, I don't think it is going to be a problem for Hyundai to do something similar.

The world is changing in ways 99.999% of people don't understand. Sometimes I wish I didn't understand. Ignorance is bliss!

Smart cars are a different thing. A Smart is like a Mini or a Fiat, it's not an economy car. It's a premium, European niche car. If you look at the demographics of who buys a Smart and who buys a Hyundai Elantra, they are *very* different. There is a sort of prestige to owning a Smart, it isn't something one buys because it's all they can afford...same as a Mini or Fiat. Jennifer Lopez drives a Fiat and a Smart...she doesn't drive an Elantra.

Anyways, even if it were the same thing, the Smart is not the same brand as the S65. Do you think people would buy en masse a $200,000 Smart? That's a better analogy.

[pj8708]

If my forecast of the U.S. economic environment for the next 20 years is correct, not having additional distribution channels for its more expensive vehicles could be a benefit for Hyundai.

And if Mercedes dealers like the one a couple of miles from my home can display $12,000 Smart cars a few feet from $200,000+ S65 sedans, I don't think it is going to be a problem for Hyundai to do something similar.

The world is changing in ways 99.999% of people don't understand. Sometimes I wish I didn't understand. Ignorance is bliss!

Smart cars are a different thing. A Smart is like a Mini or a Fiat, it's not an economy car. It's a premium, European niche car. If you look at the demographics of who buys a Smart and who buys a Hyundai Elantra, they are *very* different. There is a sort of prestige to owning a Smart, it isn't something one buys because it's all they can afford...same as a Mini or Fiat. Jennifer Lopez drives a Fiat and a Smart...she doesn't drive an Elantra.

Anyways, even if it were the same thing, the Smart is not the same brand as the S65. Do you think people would buy en masse a $200,000 Smart? That's a better analogy.

Additionaly; ....my dealer sells MINI next to their Lexus, Jaguar, Range Rover, Volvo and Infiniti. I don't quite see the fit of the MINI, but it works for them.

[SW03ES]

The Mini is premium car. Buddy of mine just got a 328i and he was also closely considering a Mini. the Smart is the same way, woman I know traded her Mercedes GLK on a Smart. Totally different than an Elantra or Corolla, etc.

[1990LS400]

The Mini and Smart are "premium" cars? I thought they were inexpensive niche cars. The basic Smart car sells for over $4,000 less than a base Elantra and a base Mini sells for less than $4,000 more than a base Elantra.

Three things that would make me leave Lexus for Hyundai? --> Content for the money (value), technology, reliability.

My 2000 LS400 is now at 143,500 miles and I plan to keep it until 2015 when it will be at around 200,000 miles.

Will I buy another 3-year old off-lease LS? In 2015, that would be a 2012 LS460 and I would prefer a fairly basic "L" but with the low end rear seat toy package. However, I think I'm more likely to buy a 3-year old off-lease 2012 Hyundai Equus with all the bells and whistles which I suspect will cost about half the price of a used 2012 LS460L in 2015.

I'm kind of looking forward to "fly under the radar".

[SW03ES]

The Mini and Smart are "premium" cars? I thought they were inexpensive niche cars. The basic Smart car sells for over $4,000 less than a base Elantra and a base Mini sells for less than $4,000 more than a base Elantra..

They are premium in regards to the niche they serve, not their price. Like I said, Jennifer Lopez has a Fiat, my coworker traded a Mercedes GLK for her Smart, the Mini has been the focus of movies and has a racing heritage. They are a completely different category than an Elantra, no matter what they cost.

The Smart is not an economy car, like I said it's not something one buys because it's all they can afford, the Elantra is. Nobody "wants" an Elantra, they do "want" a Smart or Mini.

Will I buy another 3-year old off-lease LS? In 2015, that would be a 2012 LS460 and I would prefer a fairly basic "L" but with the low end rear seat toy package. However, I think I'm more likely to buy a 3-year old off-lease 2012 Hyundai Equus with all the bells and whistles which I suspect will cost about half the price of a used 2012 LS460L in 2015.

See, you've illustrated the problem. What we're really talking about here is new buyers, you've shown why the Ls460L is a better value overall from a new purchase than the Equus despite the Equus being significantly cheaper upfront. That's precisely why I did not choose the Genesis over the ES. Here's the thing though, if the lease payments were the same I might have, Only way to do that because the residuals are so poor is to subsidize the lease. I think they should do that.

Sure it's a great value if you buy it 3 years old and drive it until it's 200k miles. However, even with 200k mikes someone will buy your LS and pay you several thousand dollars. My guess is you would have to donate a 15 year old 200,000 mile Equus, it would have no value.

[LexBob2]

Isn't this veering off of the original topic a bit? Seems like it would be a good thread on its own, if there hasn't been one already.

[SW03ES]

Not really...the topic was the Genesis compared to the Lexus ES, and we're discussing Hyundai's effort to compete with luxury nameplates like Lexus without its own luxury branding division...