Last post on Nov 17, 2010 at 1:17 PM
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#778 of 786 Re: Toyota is on the Offensive. Will it work? [hpmctorque]
Nov 10, 2010 (9:32 am)
Stay the same, and you eventually fall behind
Hyundai caught everyone asleep at the wheel. Most brands reserve direct injection for their luxury brands and high-end models, and here they show up with 200hp and 35mpg in their base mid-size sedan.
It was a wake-up call to the whole segment.
Toyota has no choice but to respond. Their bread-and-butter Camry puts out a formerly competitive 169-179hp/32-33mpg. Today, that's 2nd fiddle.
Trouble is, Toyota and Honda have been leap-frogging each other by taking baby steps, and here comes Hyundai out of nowhere and blows them both away.
You can bet they are busy planning product responses now.
#779 of 786 Re: Toyota is on the Offensive. Will it work? [ateixeira]
Nov 10, 2010 (4:34 pm)
It'll be really interesting to see what Toyota and Honda do with their next generation Camry and Accord. And what about the next generation Malibu, Fusion and Fiat-inspired Chrysler/Dodge, just to name a few more models that will have to scramble to compete with the Sonata?
#780 of 786 Re: Toyota is on the Offensive. Will it work? [hpmctorque]
Nov 11, 2010 (7:56 am)
One thing I've always felt is that having a luxury brand slotted above your mainstream brand is a handicap to the lesser brand.
For example, when Ford had Volvo and Jaguar, a Lincoln always had to be a little less than a Jag. Lincoln often got a less powerful engine, fewer niceties, etc. So Lincoln became "Jaguar Light".
Cadillac didn't have that handicap, it could be all it wanted to be. Cadillac whopped Lincoln, badly. Ford is now trying to reinvent Lincoln, since it sold Jaguar and Volvo.
Same applies to Toyota. If Lexus has to be nicer, that limits how good a Toyota can be. Same for Honda with Acura on top. And Infiniti over Nissan. None of the lesser brands can match their big brother else they will cannibalize them.
Hyundai does not have that handicap. They ARE the premium brand above Kia. So Hyundai can go all out. DI for all, even at shockingly low price points.
The other mainstream brands got caught sleeping at the wheel.
Even now, their response must be calculated. The Accord cannot step on the toes of the TL. The Camry cannot cannibalize the ES. They can only do so much.
It'll be interesting to see how things develop.
#781 of 786 Re: Toyota is on the Offensive. Will it work? [ateixeira]
Nov 11, 2010 (2:22 pm)
You make a valid point, but then you say that Hyundai is above Kia, which seems to dilute your message. I'm really not clear on Kia's positioning in the marketplace. What does the Kia brand stand for, and how does it differ from Hyundai?
#782 of 786 Re: Toyota is on the Offensive. Will it work? [hpmctorque]
Nov 12, 2010 (9:38 am)
What I've heard is that Hyundai will try to be the more upscale brand, while Kia strives for sportiness. I'm not sure I believe the latter, but the former is arguably true (Genesis, Equus).
Interestingly, Kia made the 200hp engine standard on the Optima, while the base Soanta gets 198hp. Not a big difference, but it shows that they are not letting Hyundai limit what Kia can be.
On the surface it would seem Hyundai is "above" Kia, but not really, they are striving for different a character for each brand.
VW did the same thing - Audi went Sporty, VW tried to go upscale. The Phaeton and A8 coexist even today in Europe (and it will likely come back to the USA).
I'm not sure it has worked that well, so let's see if Hyundai can manage.
#783 of 786 Re: Toyota is on the Offensive. Will it work? [ateixeira]
Nov 12, 2010 (4:04 pm)
The U.S. market VW/Audi positioning strategy makes sense, and is working, but the Hyundai/Kia strategy is still unclear to me. There's not enough differentiation between Hyundai and Kia, in my opinion.
#784 of 786 Re: Toyota is on the Offensive. Will it work? [hpmctorque]
Nov 15, 2010 (9:53 am)
VW sort of backed out of that strategy, though.
Look at the cheapened Jetta, for instance. They're going after volume now.
#785 of 786 Re: Toyota is on the Offensive. Will it work? [ateixeira]
Nov 15, 2010 (4:04 pm)
Going after volume is consistent with the VW brand's objectives. While Europeans are willing to pay more for independent rear suspensions and quality plastics in the interior, Americans value size and relatively low price. VW didn't cheapen the European Jetta, just the American one.
Now, it would be surprising if they cheapen Audi, since that's VW's upscale brand, and Americans shopping in that category are willing to pay more for luxury and quality components.
#786 of 786 Re: Toyota is on the Offensive. Will it work? [hpmctorque]
Nov 17, 2010 (1:17 pm)
Isn't VW/Audi's goal to be the No.1 car company in the world based on sales? After watching GM and Toyota fall from grace, why would anyone want this title. it seems something has to suffer to attain this goal.
The auto market in the US is already tight. I'm not sure a "cheapened" Jetta is the right idea.