Although close to what we saw last week, this is different information than what was posted then. Last week we found that Subaru ended 2008 with profits+. This article is about January sales only, and shows that Subaru is continuing to show profits were most others are failing. We also learned that Hyundai is right there with Subaru saying FU to the economic crisis and refusing to lose business because of it.
I don't think people realise how big and important that corporate marketing ploy is. I mean, this is nothing short of brilliant maneuvering, IMO.
Yes, and stupid people will line up all day for it. I saw that HD has a deal going now where if you buy a new sportster now, if you trade it in on a new bike within a year, you get full MSRP for the trade-in.
I mean it; its absolutely brilliant right up there with the 10-year warranty knife. Its a token amount to the car company to cover their dealer who has to take the car back, and the dealer then gets used inventory that they can markup and add to their bottom line. But it represent a perception in the mind of a buyer that they aren't going to end up up-side down in payments for a car. Granted thats kinda hard to be in only 12 months, not even Hyundais depreciate that fast, But that kind of assurance will pull in people who maybe wouldn'tve otherwise been car shopping, even with the 0% interest making the car a better deal. Just because it assumed (even if its laughable) a bit less risk. Its a brilliant tactic, and if it was the brainchild of the US executives of the company, then bravo. Subaru is doing well just purely because its a leaner, more efficient, better run company with a more consistent and loyal customer base.
actually a new car depreciates 15-20% the second you drive it off the lot. so unless you make that much of a down payment, you're instantly upside-down. that's why some companies require gap insurance for people that are upside-down going into the car before it's off the lot.
yeah, strictly speaking you're right. I chose to buy some GAP because I emptied my savings for down payment to buy mine & didn't have any net. Not the wisest overall financial choice, but it worked out okay for me. But the 'not-new' depreciation is not what most people fear, its residual value depreciation vs reliability. Its just that most folks don't treat them as 2 separate things. Most of us aren't old enough to have been through 2 or more cars that still have notes on them, and are broken. Most of us also haven't been thru a situation of having note while unemployed for more than 2 quarters (i hope?), and having broke cars they're upside down in. Hyundai basically ripped both sides of the argument out now. The 10 year passed off the reliability problem (in the buyer's mind), and now this takes away a financial anxiety too. My mother basically is the ideal customer who's experienced all that stuff above, has a 1999 car and never bought new, and has only been in her current job for 2 years (after being unemployed for almost 4 years). She's already so pragmatic that taking on another debt in these times would be a terrible stress to her, and I can only imagine many people like that who are trying to be frugal and employed. This package gets her into a more modern car with more safety features and virtually no worry to bear on a reliability problem that comes up. ....or you could just be like my friend from HS who bought is car(s) in full on cash. O_O;;
I think it's riskier than you realize to hedge your bets that way. Through these strategies, Hyundai has the ability to just be shifting costs onto later reporting periods to effectively improve their current bottom line. Now, if they believe that they're building quality products and won't have any warranty issues in 10 years, it's a good idea. But entering into the boy-racer segment with the new Tiburon may end up getting Hyundai's goat. That's a lot of potential warranty cost that they could be looking at. With regards to the buy-back strategy, they just have to hope that the job market picks itself back up, because every buy back has to give a pretty significant hit on the bottom line.
Yeah, its really contingent upon the build quality if it works. By and large, i have more friends with hyundais than anything else (outside of here), and their only complaint has been the short life of the timing belt (60,000), and the weak depreciation. other than that, they've all loved theirs. as far as the economy. we're about to enter a job slump, but all the other things going sour are not really long term disasterours 20 years to fix things that I'm seeing. And like I said, the buy-back is between the dealer and the manufacturer. Most dealers will happily take on inventory they can markup with no loss for what amounts to a factory kickback. But the factory can (likely does) spread that bottom line hit in future promises to the dealership. At least that's what I'd do to protect the factory for the shit hitting the fan if my main plan didn't work. but in a way, all of this is almost a steadying mechanism in of itself. They're soliciting more business is basically saying "yeah, you may think the economy is in pain, but we're doing fine. so YOURE doing fine too if you stick with us." Then other people, and other companies peripheral to Hyundai start to think the same thing, and the ripples flow all over, just like the panic problems at the end of 08 rippled around.
http://www.edmunds.com/insideline/do/News/articleId=142489 ...and its officially Hyundai's game. In 10 years, I predict that they will be more of a threat to Toyota than GM is. American car executive should be ashamed that they didn't run something like this first, and will now be playing catchup. Instead of fighting off the public perception of being 'saved,' or of paying out chunky executive bonuses (or whatever), or a layoff-happy shrinking violet at war with their union, they could have been perceived as the Rock of Gibraltar in the face of economic troubles. Most people's car payments are under $400, and if you can't find a job in 3 months, its very likely you will be unemployed more than a year anyways. This is a minimal risk with great public appeal. This program is on top of the buy-back with depreciation program.
I don't think it will be 10 years.A little over 3 years ago when I was working for Lexus the word was that if they(Hyundai) keep it up they will be a serious competitor in less than 10 years.Do the math. This kind of spills over into the Genesis coupe thread that was going on not too long ago.