In 2017, we will see Hyundai attempt to break into the luxury car market with a new model in attempt meet consumer behaviour trends.
Recent statistics show that there has been a fall in medium sedan sales this year alone, with the Toyota Camry sales falling 33% over the last 3 months (Dowling 2016). Where as by contrast, luxury sedan models are skyrocketing with the BMW 3 series (the leading luxury sedan model on the planet) sales surging 50% over the past 2 months (Dowling 2016).
There are various potential reasons as to why this shift in the trend is taking place. A luxury sedan is a ‘luxury’ expense, meaning that it is by no means necessary for every day living. This would indicate that the luxury vehicle could be categorized as a pure convenience expense. When analyzing the three-dimensional construct of consumer involvement, personal factors ie. Self-image play a large part in the decision making process of owning al luxury car (Iacobucci, 2014). One’s perception of themselves and others can drastically change depending on the type of car that they own.
Similarly, when deconstructing Maslow’s hierarchy of needs, a luxury vehicle can appeal to the social and self esteem needs to ultimately achieve self-actualization (Iacobucci, 2014). Maybe the consumer feels they need to buy a luxury car to be accepted into the desired social class. Or it could potentially be purely self-orientated, ie. The consumer wants this car because it makes them feel good.
It has become evident that stock sedan isn’t enough this year and there is vast market potential for luxury model cars, but can Hyundai compete with this bold move? Hyundai aren’t typically known for their ability to produce high-class luxury sedans, which automatically creates an expectation among the consumer. The consumer may have lower expectations of this product, because they are aware the company is new compared to existing manufacturers ie. BMW (Broniarczyk & Griffin, 2014). These leading luxury car manufacturers (BMW and Benz) market themselves on their high quality ingenuity and ability to make the most powerful road cars in the world. Hyundai are reputable for being able to achieve this on a lower scale, more affordable car. Therefore they are going to have to match this consumer expectation and create a ‘wow’ factor to persuade the consumer to purchase their product over others.
The new model Genesis G90 will certainly rival the BMW and Benz brands in power with a 5.0-litre, 420-horsepower V8 engine for the motor heads, but also seems to be conveniently priced at sixty thousand dollars (Zhang, 2016). This is substantially cheaper than the leading brands, which are closer to eighty thousand for a similar model. Hyundai are using price as a mechanism to market the car above other brands (Broniarczyk & Griffin, 2014). However, they must be careful not to put the price too low, as then the product loses its prestige and consumers will no longer value the product as a ‘luxury’ vehicle (Broniarczyk & Griffin, 2014).
The medium luxury car industry is seemingly becoming saturated in terms of manufactures attempting to break into the growing field. Other manufacturers such as Lexus and Jaguar are attempting a similar feet, whilst others such as Nissan are attempting but failing to do so in comparison to the leading brands (Dowling, 2016). Hyundai will attempt to crack the field in 2017 with something revolutionary, but we will just have to wait and see how the consumer will perceive it as a true luxury vehicle, or just another cheap forgery