They’re called cannibals in spite of the fact that they do not eat their own…
In spite of the fact that they do not eat at all, in spite of the fact that the only thing they ingest is liquid..they are cannibals! They are automobiles, and like hot backup goaltenders who make life difficult for the number one starting keeper in the NHL, these vehicles are seemingly designed and built to challenge a big brother, a high profile teammate, or a respected compatriot.
The latest example comes from Hyundai. Their 2012 Azera is more expensive than it used to be, more attractive, better equipped, and more powerful, too. At $32,000, it’s poised to take on cars like the Buick LaCrosse, Chrysler 300, Nissan Maxima, Ford Taurus, and, get this, the Genesis V6. Remember the Genesis? It’s a Hyundai, just like the Azera, and it’s starting price is only $2200 north of the Azera’s.
It’s not as though the Azera and Genesis are wildly different cars, although one uses a front-wheel-drive configuration; the other rear-wheel-drive. Both are large, leather-lined upscale cars, definitively not mid-size Camry competitors. Clearly Hyundai believes that by emphasizing performance with the Genesis – it has 333 horsepower and the more conventionally sports-oriented rear-wheel-drive setup – and steering towards comfort with the Azera – it comes standard with many features that are optional on the more expensive Genesis – that they’re targeting two difference clienteles.
The problem is, even if that’s the case, both groups end up in the same showroom, which begs the question: why not research, design, develop, and build one car? Wouldn’t that save time, energy, and money? You don’t send two auto transporters across the country loaded with just one car each, right?
One can argue that Hyundai hasn’t made a lot of mistakes in the recent past. Arguing with their methodology is like suggesting Apple Inc. “probably got it wrong with the iPhone 4s.” However, the vehicle through which Hyundai most recently flopped was the previous-generation Azera. Sales fell every year from the relatively low peak of 26,833 in 2006.
Hyundai itself is just now pointing out that the Azera’s whole cross-section of competitors only compete for about 600,000 sales per year, which is a stretch. That’s less than 5% of the U.S. new vehicle market. What’s worse, Hyundai’s U.S. boss, John Krafcik, says half of these sales go to fleets, not the most desirable type of sale. And Hyundai’s sales chief, Dave Zuchowski, says Hyundai hopes to grab 15,000 of these sales in what, for the Azera, will be an abbreviated 2012.
The Azera vs. Genesis battle isn’t the only one to watch. There’s a constant war being waged between subcompacts and their larger-but-not-much-more-costly compact siblings. Purchasing a full-size brute of a truck will cost very few thousands more than the no-longer popular small trucks, and sometimes the difference is nonexistent when discounts are taken into account. High-end sports cars are routinely up against other high-end sports cars made by the very same automaker.
Consider specific examples. BMW’s 135i is $600 more than the larger but less powerful 328i. Also in BMW showrooms, the company introduced an awkward-looking, less spacious, sportier X5 offshoot called the X6 a few years ago, yet in 50i form, it costs $6000 more than the roomier, better looking X5. BMW will soon release the 6-Series Gran Coupe to challenge, well, the real 6-Series as well as a low-end 7-Series and a high-end 5-Series. Over at BMW’s German rival, Mercedes-Benz started a trend by introducing the CLS-Class. It’s not a real coupe, though Mercedes-Benz will tell you it is. But it is a good enough car to steer 600 or more buyers away from the E-Class sedan every month. Audi has done the same with the A7/A6 conundrum.
Continuing to look at German automakers, Porsche’s Cayman R is, objectively, a better car than a basic 911 and it’s $15,800 cheaper. Granted, the Cayman R was aptly-timed, released just as Porsche finished with one 911 and cranked up another. The Chevrolet Camaro ZL1, a riotous example of Chevrolet’s entry-level muscle car, is more than $4000 more expensive than the basic version of Chevrolet’s high-end sports car, the Corvette.
Way down the price ladder, a look at American small cars reveals that Chevrolet’s subcompact Sonic, in top of the line LTZ trim, is a few dollars more than Chevrolet’s compact Cruze LT. Over at Kia, the boxy and stylish Soul has an MSRP $300 above the MSRP of the curvaceously stylish Kia Rio 5-door.
Perhaps it’s indecisiveness, perhaps it’s the inevitable confusion that arises when a company grows rapidly. Hyundai’s Azera and Genesis infighting may be a shining example of internal showroom battles, but every automaker has its issues. Strange, self-created, cannibalistic issues. But issues nonetheless.