By on October 24, 2011

We’ve reviewed a lot of Korean designs here lately. The Soul. The Rio. The Veloster. The Sorrento. The Genesis. The Optima Hybrid. The Cayenne S. Actually, rumors that Porsche made a straight-up trade of engineering (the original Hyundai Santa Fe’s 2.7L V-6) for styling (the original Cayenne is clearly pretty much the same as said original Santa Fe) are completely unfounded. Some of these cars may not be quite up to the standard of their competition, but others are either the critic’s choice of the segment or the actual freaking segment sales volume leader.

Price has been a big part — for a long time, maybe the only part — of Korean-brand appeal in the United States since the very first Excel arrived with “$4995!” plastered on the windshield. In 2011, however, the Hyundai, Kia, and Daewoo vehicles aren’t always the cheapest choice. Which leads us to the question:

What should the “Korean discount” be? What form should it take? Should the Korean entries in a segment be cheaper? Better-equipped? Both? Compared to the competitors from Honda, Toyota and (maybe) Nissan, how much money do you need to save to look at a Hyundai, Kia, or Daewoo (meaning Chevy)? Or have we finally reached a point in time where the answer to the “discount question” is nothing at all?

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91 Comments on “Ask The Best & Brightest: What’s The Korean Discount Nowadays?...”


  • avatar
    gslippy

    H/K still has the leading warranty, which ought to mean something to new car buyers wondering why Toyota, Honda, and Nissan don’t offer it.

    Styling is another important factor, and in this area H/K is clearly leading. Just look at the 2012 Civic or Accord.

    If you’re just buying based on price, H/K is often still the leader, but for me there are other factors to drive the purchasing decision.

    Daewoo? Just try to find a dozen Americans who even know of that brand’s relationship to Chevy.

    • 0 avatar
      bd2

      Remember, Toyota is offering “free” maintenance these days.

      Also, the avg. transaction price on the Sonata is right on par with that of the Camry; granted, this doesn’t tell us how well equipped the 2 on avg. are driven off the lot, but it does give us a generally impression of the typical buyer.

      In addition, one way to look at “discounting” is by looking at incentive-spending in comparison to the average transaction price.

      For Sept. 2011

      Nissan – $ 2,925 (10.7%)
      Toyota – $ 2,472 (9.7%)
      Honda – $2,370(9.3%)
      Hyundai/Kia – $ 1,454 (7.6%)

      For comparison’s sake -

      Ford – $ 2,814 (8.8%)
      GM – $ 3,255 (9.8%)

      Upon looking at discounting in this manner, Nissan is the biggest discounter.

      • 0 avatar
        tuffjuff

        I’d take into consideration that the detroit 3 all have pretty heavily discounting for their large number of truck and SUV sales. A local ad showed up to $10,000 (!!!) off on certain Chrysler minivans, for example.

        Sometimes discounts are necessary. For instance, the current Fusion has had $2-3,000 on the hood all year, it’s just not that competitive on much else but price (the styling is disputably bland) and while a great car it just isn’t up to the task on standard features for the price, which is probably why it’s so heavily discounted.

    • 0 avatar
      PlentyofCars

      I don’t buy a car based on the warranty. Which would you choose?

      A) Car with the best warranty that breaks down all the time.

      b) Car with no warranty that never breaks down.

      While Toyota’s do break down from time to time. The fact that it is rare sells the cars.
      And it is perception that matters, more than the actual record.

      Hyundai’s have a great warranty, because up until recently, they had to come with a great warranty in order to sell the cars. The fact that a lot of people focus on the warranty, shows that it works.

      Warranties are nothing more than prepaid maintenance new or used (with a price cap and expiration date).

      Doubtful a low mileage used Lexus will break down; so skip the CPO and they will immediately chop $995 off the price. You still get the remainder of the new car warranty. Look; if it does happen to break down, you have the $995 you saved towards the repair. And since you don’t have the warranty you could get it fixed cheaper elsewhere.

      • 0 avatar
        bd2

        It’s not as rare as you think.

        For instance, the outgoing model of the Camry was found to be more problematic (esp. the V6 model) than the previous gen Sonata by Consumer Reports.

        It was Toyota that had sludge problems and Honda that had prematurely failing transmissions; both brands are still pretty reliable but there isn’t much diff. btwn them and most other brands these days.

        Also, recalls aren’t counted when it comes to reliability reports and Toyota has had the greatest no. of recalls over the past couple of years.

      • 0 avatar
        CJinSD

        The vast majority of Toyota recalls were knee jerk reactions to a fictional problem.

        139,500 of the new Sonatas were recalled for steering issues:

        The National Highway Traffic Safety Administration (NHTSA) report at safercar.gov identifies the issue says “the steering column intermediate shaft universal joint connections may have been either improperly assembled or insufficiently tightened.” The consequence could be “a complete separation or compromised attachment of the connections, such that the driver could experience a loss of, or reduction in, steering capability increasing the risk of a crash.”

        http://www.autoblog.com/2010/09/26/breaking-hyundai-recalling-nearly-140-000-new-sonatas/

        Other new generation Sonata recalls have included blown high pressure oil lines on the turbo and door latch failures. I’d rather have a car that is merely targeted by ambulance chasers and the Obama regime for imaginary SUA.

      • 0 avatar
        tuffjuff

        My 2010 Kia Forte EX ended up being shunned by Kia and refused to be repaired or even *TALKED ABOUT* after just 13 months and 22,000 miles.

        I’ll take a new car that isn’t a Korean with NO warranty over a Korean car with an indefinite “warranty,” at this point.

      • 0 avatar
        gslippy

        @PlentyofCars:

        Hyundai’s success today was built upon their older cars, which weren’t so bad. Your impression that H/K’s products are unreliable is belied by the fact that the company is super profitable – even during Carmageddon 2009. For comparison, Chrysler’s original 7/70 warranty ended because they couldn’t afford all the repair costs.

        Or perhaps they ignore warranty claims, as tuffjuff indicates below. If this was so, their sales would eventually suffer and they’d be in legal trouble.

        My past experience with a new Honda Odyssey under warranty is enough to make me never touch that brand for a long time.

    • 0 avatar
      bd2

      LOL!

      Only a small no. of those 139,500 Sonatas that were recalled actually had a problem, but they had to recall that amount to check to make sure there within a certain production period.

      The previous gen Honda Odyssey (which has turned out to be a pretty reliable vehicle once you get past the transmission issues) had FIVE recalls within its 1st year of production, including one for improperly assembled steering columns.

      And according to TrueDelta, the new Sonata gets an above avg. rating for reliability which is pretty good for a new model.

      Google Toyota and steering problems – there have been numerous such issues, including a recall last year of over 400K Avalons and LXs over steering-related problem.

      Also, due to numerous complaints over steering in the Corolla, the NHTSA has opened a probe, but Toyota has told regulators that it isn’t a “safety problem” despite there having been 11 injuries in 18 crashes, and instead offering free repairs to anyone who asks.

      http://content.usatoday.com/communities/driveon/post/2010/07/toyota-offers-free-fix-but-no-recall-for-corolla-matrix-steering/1

      I know you have an anti-Hyundai bias but is this the best you can do? lol

  • avatar
    heliochrome85

    I have a 2011 Optima EX with the Premium Package. When I was shopping for my car, I drove the TSX, the GTI and the Sonata. The Accord drove very big, and the Camry was way too boring. When it came to numbers, nothing came close to the level of equip on the optima and in my eyes, the build. The camry was the closest but the cost cutting was apparent everywhere in the cabin. Ultimately, the deciding factor was money. My current lease is 275 a month after tax, with 600 dollars down on this optima. The fusion was a minimum of 325 for the SE, as was the GTI. I could have gotten camry or accord, but both were underequipped for the same amount. The Sonata SE was 300 a month. In the end, I have put 9200 miles on my car and where ever I go, I still get asked about it. Its definately a looker, and I could not be happier. For all those people who say they drove a kia/hyundai in 1991 and they are tin cans, drive one today. I wouldnt kick a CTS-V out of bed because I’ve driven one of the malaise era Seville 8-6-4s…

    • 0 avatar
      gslippy

      “I wouldnt kick a CTS-V out of bed because I’ve driven one of the malaise era Seville 8-6-4s…”

      What a great line. Somehow people seem to trust Cadillac but not Hyundai/Kia. Both company’s products are not remotely close to what they were 10-20 years ago.

      • 0 avatar
        CJinSD

        I’d be more swayed if my most recent Cadillac experience wasn’t with a 2005 DTS and my most recent Hyundai/Kia experience with a number of 2008s. The DTS was a powerful enigne away from being completely unimproved over the STS I drove in 1993, and the Korean cars were still lacking in many areas taken for granted in the best Japanese cars. As nearly new used cars, the price difference between the Kias and comparable Hondas and Toyotas was about the same percentage as the difference between an Equus and an LS460. My friends bought the Hyundai and the Kia, but the reason was the price difference and neither of them were happy with their purchases once the novelty of having a different car wore off.

    • 0 avatar
      tuffjuff

      The 2010 Forte EX I had was a tin can. That’s why it was sold after 13 months.

      I hope you have good luck with your Optima. I guess time will tell – my Forte seemed fine for the first half a year or so, and then the cost cutting became apparent. There’s a reason you get SO much stuff for so little money, i.e. an Optima EX with Premium Package costing less and offering more than a Sonata Limited.

      • 0 avatar
        dolorean

        “’10 Forte EX I had was a tin can.”

        Yep. Pretty much succors every test drive I’ve ever had in an H/K car. Its that feeling that although all the bells and whistles are there for a good price, the feeling of quality is illustionary. The doors never quite THUNK and the steering is always just off somehow, and don’t get me started on the manual’s ropey feel or worse, a broomstick shoved into a jar of dry spaghetti.

        Keep trying H/Ks about every two years and keep finding the same issue everytime. Meanwhile Ford and GM just keep getting better.

  • avatar
    Jason

    In my case (2011 Forte5 SX) the answer was “nothing at all” + warranty. It really was the vehicle I wanted the most out of my available choices of that sort of vehicle, all things considered.

    Also I need to fix my icon…my beloved 2002 Maxima SE is no more.

  • avatar
    Yuppie

    My impression is that most Korean cars, compared to their Japanese competitors, are competitive overall but rather lacking in engine refinement, especially when compared against Honda or Toyota, and especially with respect to inline 4 engines. So depending on the segment this shortcoming may be worth more or less.

    • 0 avatar
      DeadWeight

      After driving or riding in quite a few Korean vehicles, I’m of the opinion that the Koreans have much to learn about suspension geometry, suspension part design and/or suspension part manufacturing (although it’s my understanding that many of the components used come from many of the same suppliers that supply American, Japanese and German automakers, so the last on that list is probably the least likely cause of vehicles that ‘thunk,’ ‘klunk,’ ‘clang,’ ‘thump,’ ‘whump,’ and rattle, porpoise, move laterally [literally] and makes all sorts of other unsettling noises and movements while in motion).

    • 0 avatar
      GS650G

      My Korean car has a Japanese V6 ( 3.5L) so that solves that problem.

  • avatar
    millmech

    Not to be off-topic, but can anything be done to get rid of the EXREMELY ANNOYING popups in the pictures?
    I’ve had them also come up on message boards & such, also. They’re still EXTREMELY ANNOYING.
    Thank you-

  • avatar
    Pch101

    What should the “Korean discount” be?

    That would depend upon how many cars that they want to sell and how fast that they want to build share.

    The Koreans still have far lower US market share than do Toyota and Honda. They have made incredible progress, but in terms of brand building, they still have a lot of catching up to do.

    Should the Korean entries in a segment be cheaper? Better-equipped? Both?

    Their best long-run strategy is to compete on a combination of reliability, durability, perceived quality, features and style. Competing on price over the short run was necessary, but over the long run, it’s unsustainable.

    That being said, it’s clear that they know that competing on price isn’t a wise long-term strategy, and it’s clear that they are trying to move away from that. Now that the beachhead has been established and there is sufficient scale to support the business, it’s a good time to start focusing more on margin.

    • 0 avatar
      McGilligan

      Competing on price doesn’t sound like such a terrible strategy. Offering more for less than competitors is a great way to gain and retain customers. Especially if it can be done profitably. When a great company competes on price, it looks for ways to accomplish things less expensively, not more cheaply. Things like more manageable labour contracts, flexible manufacturing, etc all help reduce costs. If H/K make that a core value, they can continue to compete on price indefinitely.

      • 0 avatar
        Pch101

        Competing on price doesn’t sound like such a terrible strategy. Offering more for less than competitors is a great way to gain and retain customers. Especially if it can be done profitably.

        But it can’t be done profitably. Margins in the mainstream automotive business are already low. Competing on price practically guarantees losses.

        From a producer’s standpoint, the goal of branding is to produce excess profit. Building up a brand, only to give away the product, doesn’t make much sense for something that has the high production costs of a car.

  • avatar
    mitchw

    Discount? Have you checked how much the Hyundai of White Plains, NY is tacking onto the Veloster? As much as 4K. And wait until people see the new Rios; these are very pretty small cars.

  • avatar
    philadlj

    “how much money do you need to save to look at a Hyundai, Kia, or Daewoo (meaning Chevy)?”

    Dude, Chevys are not Daewoos.

    Daewoo-branded cars left US shores in 2002.

    The last of the Suzuki rebadges were killed in 2008.

    This past January, the GM Daewoo brand was axed in Korea.

    The new T300 Sonic (aka Aveo aka Barina) has never been badged as a Daewoo, and the US version will be assembled in Michigan.

    I know you know all these facts. I also know you know that many automakers do exactly what GM does, and their cars don’t get called the wrong thing. So I’ll ask you: What conditions need to be met in order for you be satisfied that Chevys are no longer Daewoos?

    • 0 avatar
      Jack Baruth

      Fair question. The answer is:

      When GM is willing to state that 51% of the car, by weight or value or whatever, was designed and engineered outside the Republic of Korea.

      I asked this question at the Cruze press launch and the PR people literally refused to answer.

      The Cruze was mostly engineered by GM Korea/Daewoo. It takes a very optimistic person to believe the same is not true of the Sonic.

      • 0 avatar
        geozinger

        From the Cruze Wikipedia page: “Most of the design work was conducted by GM Daewoo (now GM Korea), with GM’s Opel division responsible for most of the engineering.”

        GM bought Daewoo in 2001 and renamed them GM Korea this year. Like philadlj noted, there hasn’t been a Daewoo car in the US in almost 10 years. It’s a distinction without a difference.

      • 0 avatar
        Volt 230

        A Daewoo by any other name is still a Daewoo. Which, unlike its Korean counterparts H/K, seems to be struck in the engineering and quality of the 90′s.

      • 0 avatar
        Pch101

        When GM is willing to state that 51% of the car, by weight or value or whatever, was designed and engineered outside the Republic of Korea.

        I don’t know what that has to do with anything.

        The average consumer doesn’t know that GM has a connection with Daewoo. GM’s ability or lack thereof to sell its Korean-engineered cars has nothing to do with either Daewoo or Hyundai-Kia.

        If the question is whether “the Koreans” have to discount their cars because of the past reputation of the Korean brands, then GM isn’t part of that. Hyundai’s bad reputation in the past won’t hurt GM, and its good reputation today won’t help GM.

    • 0 avatar
      srogers

      OK. Let’s just call it “the Automaker Formerly Known as Daewoo”.
      And they can use the bow tie as the symbol

    • 0 avatar
      CamO

      great post phil I was thinking the same

      I find this particular reviewer always has a hate on for GM

      sad

      • 0 avatar

        CamO

        With your indulgence, please allow me to quote at length from Mr. Baruth’s review of the Chevy Cruze, published :

        The 2011 Chevrolet Cruze is a good car, although at least part of its goodness comes from the fact that it isn’t really that small. It’s well-positioned against the Civic and Corolla. I believe that it beats both of those cars in significant, measurable ways. This is what it is: a good car, a bold car, a car for which no purchaser need make an excuse or feel any concern. This is what it might be: great. That’s for the buyer to decide…

        You are looking at the Cruze’s not-so-secret weapon: an interior that represents a Cloverfield-sized leap past the competition. It’s part Cadillac CTS, part Buick LaCrosse, part Chevrolet Malibu, and unmistakably GM in the way the exterior does not quite manage to be. Forget the Civic or Corolla. From the touchable dash panels to the big, comfy seats, the Cruze is fitted-out to compare directly with Accords and Maximas. The interior is spacious. Visibility is outstanding. On the road, the Cruze is genuinely quiet — not from an overabundance of insulation, but from thoughtful design. The harsh, annoying frequencies disappear, allowing the stereo to shine even at low volume. Never before has a car of this size been so relaxing to run down the freeway for four adult passengers…

        In this class, iPod integration matters more than raw power, and the Cruze shines here, offering fast, no-excuses access to my 138GB of music…

        This is a sound, cheerful, strong-enough motor, producing a nice long plateau of torque from 1700rpm on and making it easy to drive on light throttle. In recognition of the fact that TTAC readers don’t necessarily care how quickly the big little Chevy can run down a two-lane, during my drive time I chose to focus on a different aspect of “performance”. Faced with a twisty, elevation-change-laden twenty miles of bad (meaning good) road, I gripped the wheel…

        … [ellipses in original]drove the speed limit, maximized economy and smoothness, and was rewarded with an average of 36.8mpg. This wasn’t a freeway snooze drive; it was chock-full of marked 25mph switchbacks, big climbs, and plenty of descending, decreasing-radius stuff. Never did the Cruze feel out of breath despite the light throttle openings, and never did the engine feel inadequate…

        This new GM “world car” platform offers a “Z-link” rear torsion-beam suspension that seems to improve the so-called secondary ride a bit. This is a car that absorbs road imperfections very well, beating both the Civic and Corolla provided for comparison. That’s right: Chevrolet was confident enough to include two of the four heavy-hitters to the party. The Civic was a more enthusiastic vehicle, and far more fun to hustle along the back roads, but it cannot match the Cruze for features, space, fuel mileage, or interior ambiance. The Corolla has simply outlived its competitiveness, period. The Focus, had it been present, would have easily shown-up the Cruze on over-the-road pace and interface design but would have struggled with noise and interior quality perception. The Elantra would have been a tougher nut to crack, given that it is a massive improvement over its precedessor. Still, none of these cars can “waft” like the Cruze… and who would have thought that word would ever apply to a car that traces its spiritual lineage to the Chevette?

        For drivers who are not particularly worried about over-the-road sportiness, the Cruze could very well be the current class leader, and it’s likely to hold that position at least until the next “Euro” Ford Focus arrives next year. For the first time in modern history, a Chevrolet compact car is legitimately the class of the field…

        The rest of you can buy a Cruze with a clear conscience. It’s built here, it’s feature-packed, it doesn’t lag behind the competition, and it’s likely to be a reliable, decent vehicle. That’s all this segment asks for. Anything else can be dismissed as the worthless dream of a wandering dreamer like myself, a pair of ragged claws scuttling across the floor of silent seas, wishing for the day that General Motors shows us a great American small car.

        The only negative things in the review were criticism of the 6-speed automatic transmission, and GM’s fudging on the car’s origins in Korea. It was a mostly positive, almost glowing review. You’re not going to find many manufacturers unhappy with a review that concludes “legitimately the class of the field“.

        I don’t think that any objective person would say that Jack “always has a hate on for GM”.

  • avatar
    jpcavanaugh

    In my case (2012 Kia Sedona) it was a combination of price, features and warranty. The base car was roughly $4k under a comparable Toyonda (which charges a lot for its minivans) and right near the Grand Caravan. However, the combination of additional features (like the bluetooth/Serius radio) and the $4k in rebates that Kia dropped on the car, the Kia had a substantial price advantage.
    At this point, the warranty was the kicker for me. The Mopar 3.6 is supposed to be a really nice engine. Let me know in 6 years, as Chrysler has been really uneven here over the last decade or so. Kia backs the engine and trans to 100K and my dealer puts an extended powertrain warranty to 200K. At that point, it was a no-brainer.
    I have a hard time seeing how Kia can do worse than Dodges of recent vintage, and Kia will at least back the car. So either the warranty or the price difference swings it to Kia, the second just swings it farther.

    • 0 avatar
      gslippy

      My 09 Sedona was a steal when I bought it 1 year used. It’s a great car, with specs and quality as good or better than the competition. Even used, it came with a 5/60 warranty – better than many new car warranties.

    • 0 avatar
      iNeon

      Chrysler Group vehicles are covered 5/100 mechanical, 3/36 bumper-to-bumper.

      The only things that fall off any car, built by any manufacturer– in 100,000 miles– are the manufacturing labels.

      • 0 avatar
        acuraandy

        Yes, like the ‘Made in Slovenia’ sticker on the electric power steering column that went out in my ’08 Malibu suspiciously just over 100k! That GM wouldn’t cover under their warranty ‘extension’! I agree about the warranty, in the future i’ll take a cheaper/older car I can fix myself. I’ll be good.

      • 0 avatar
        iNeon

        But did it fall off?

        What I’m saying– the amazing, stupendous, mega-platinum Korean 100,000 mile bumper-to-bumper warranty is simply a 100,000 mile mechanical warranty with an additional provision for one of each one-thousand(or some other arbitrary number of) trim complaints. I do not believe, for a moment, that Hyundai will replace the shrunken/discolored windlace trims on every one of its vehicles at 9-Years, 95,000 miles. Ditto crumbly insulating foam. Likewise heel-holed floormats. Just the same for puckered rubber and greyed black trims.

        At 9-Years and 90,000 miles, things like seat bolsters and padding are showing measurable wear. Pull-cups are scored by fingernails, and dark panels are showing little white pressure marks from errant feet and objects. There will be no non-mechanical flaw coverable by this warranty at 9/90– because at this point, it is all wear and tear.

        We used to call this process ‘patinating.’ These days– we’re more fond of calling it ‘poor materials quality.’

      • 0 avatar
        geozinger

        @iNeon: To Chrysler Corporation’s everlasting credit with me, back when they had the 7/70 drivetrain warranty, the dealers DID honor the warranty up until 69,999.9, unlike the Ford dealers when I owned Ford products. Of course this is going back 20+ years.

        You’re right though, other companies have 100K mile warranties, but less time. However, I think that in the case of GM and Mopar, that 5 years is a realistic time frame that people will only keep the car for the five years (well, maybe) and that 20K mileage per year is closer to what people actually drive. What sucks is that the car payments are likely five years.

        The H/K warranty only gives you 10K per year, when doled out over the 10 years. But, I’m guessing, most people are probably financing over five years, and probably racking up either 100K miles or close to it by the time the note is paid off. (Here I’m assuming a family car, the one that makes all of the trips to work, grocery stores, Grandma’s and on all vacations. Which was my experience when my kids were young.)

        I’d guess that most folks will find themselves in the same situation at the end of the payment book with either a domestic car or a Korean car, based on mileage alone. Five year old car, and warranty expired.

        I guess it pays to drive less…

      • 0 avatar
        jpcavanaugh

        Kia has a 5 yr/60K bumper to bumper in addition to the 10/100 powertrain.

      • 0 avatar
        jpcavanaugh

        @ineon: My goal in buying any new vehicle is to avoid the next 2.7 V6 or the next Ultradrive. Both of which came from Chrysler, incidentally.
        Although I am a Mopar fan from way back, I have heard and read enough horror stories about bad problems with new designs that I do not care to bet my own money since I plan to keep a new car for a long, long time.
        The new 3.6 or the new 6 speed auto may go down in history as one of Chrysler’s great designs, right up there with the slant 6 or the Torqueflite. But recent history says otherwise.
        It is a lot easier to design quality down deep into a car when you are growing and making money. It is much harder when you are scrimping to keep the lights on, as has been Chryslers situation when these components were under development.

  • avatar
    Philosophil

    While the new styling cues and diversity of styles (e.g., Rio and Soul) are helping to draw more attention to Hyundai and Kia, I don’t think they’ve quite reached the status of being a ‘standard’ brand name (e.g. like Toyota or Honda). As a result they still need to present themselves as a ‘good value.’ It may still take a few years before people begin to automatically associate the names ‘Kia’ or ‘Hyundai’ with positive qualities other than ‘value,’ but until that happens I think they still need to sell themselves, not necessarily as a ‘value’ brand, but as good value for your dollar (i.e. lots of standard equipment with competitive interior quality for a reasonable price).

  • avatar
    carguy

    There is only ever a “discount” when the car does not meet market expectations and thus needs to undercut its competitors on price. In the case of H/K I’m not sure that there is a great difference any more and most buyers have gotten over the “made in Korea” stigma just as they did in the 70s when “made in Japan” had negative connotations.

  • avatar
    bikegoesbaa

    Try finding a Korean car on Criaglist with 200k+ miles that is still running well, passing emissions, and on its original engine, head gaskets, and transmission.

    Really, go try it. They’re out there, but few and far between.

    In contrast, it’s really easy to find Japanese (or even US/Euro) cars with 200K+ that are still running well with all their original major components untouched.

    Yes, the overall content and execution of Korean cars is much better now than it was a few model years ago. No, this does not mean that they are any more able to put down big miles reliably. If anything, their recent adoption of more complex powertrains and electronics is a negative indicator for long-term reliability.

    So, considering that a Korean car’s useful life span might well be roughly half that of the Japanese equivalent, I’d only be interested if it cost half as much or offers twice as much car for the same money.

    Once I see a generation of Korean cars that can routinely do 200k without catastrophic failures I’ll be willing to pay Japan money for them. Until then, no deal.

    PS – Yes, I know all about the 10/100 warranty. I don’t care.
    PPS – I’m sure your roommates mother’s neighbor’s Sonata has gone 250K without so much as a burnt out lightbulb. Despite that, I still don’t see many/any Korean cars for sale with 200K+.

    • 0 avatar
      jmo

      No, this does not mean that they are any more able to put down big miles reliably.

      In fairness the median car with 200k miles would be about 13 year old. They may have made substantial progress. It’s also not certain that Toyhonda hasn’t decontented their cars over the past 13 years to make your comparison valid.

      If anything, their recent adoption of more complex powertrains and electronics is a negative indicator for long-term reliability.

      Yes, because we all know the adoption of electronics has made cars so much less reliable. I long for the days of points and distributors and carburetors – god those cars would last 300k 400k miles easy.

      • 0 avatar
        bikegoesbaa

        There’s no shortage of people who put 30K a year on a car, and no shortage of 6-year-old Japanese cars with 200K miles. However, there is a distinct shortage of 6-year-old Korean cars with 200K miles.

        The difference is that the Japanese (and to a lesser extent US and European) automakers have proven that they are capable of building a car that has a very high chance of going 200K miles reliably. They may or may not be doing that today, but they’ve demonstrated that they can.

        The Korean automakers haven’t proven that they’re able to do it at all.

        Why are you talking about points, dizzys, and carbs? I think you missed the point.

        In 2006, Korea couldn’t reliably build a 200K car with a NA MPI engine, 4-speed auto, and conventional stereo and HVAC controls.

        Today, they’re selling cars with direct injection engines, sometimes with a turbo, mated to a 6-speed auto, and featuring complex voice-activated telematics systems.

        They couldn’t make the easy stuff hold up, so I doubt they’ll do any better with the new harder stuff.

      • 0 avatar
        jmo

        Why are you talking about points, dizzys, and carbs? I think you missed the point

        The last 30 years of automotive development has pretty clearly shown that the newer more complex vehicles are much more reliable that their more conventional predecessors.

        Your theory that They couldn’t make the easy stuff hold up, so I doubt they’ll do any better with the new harder stuff. Isn’t supported by fact of massively increasing automotive reliability over the past 30 years.

      • 0 avatar
        bikegoesbaa

        You definitely missed the point.

        There’s a difference between electronic vehicle controls that replace inferior electromechanical designs, and adding more complexity to noncritical entertainment systems.

        Carburator to EFI is not the same as conventional radio to Voice activated network enabled radio.

        How many complaints/issues has Ford had with Sync and MFT? How’s that compare to their previous-generation conventional dash?

        Do you really believe that a DI turbo 6-speed autobox powertrain is inherently more reliable than a NA MPI 4-speed powertrain made by the same manufacturer to the same price point?

        From talking to friends who are technical guys at companies that supply both Japanese and Korean automakers, my understanding is that as recently as this year the specs/expectations of the Japanese manufacturers are still by far the highest in the industry.

      • 0 avatar
        jmo

        Do you really believe that a DI turbo 6-speed autobox powertrain is inherently more reliable than a NA MPI 4-speed powertrain made by the same manufacturer to the same price point?

        Yes, and the fact that you don’t indicates you don’t really understand what you’re talking about.

      • 0 avatar
        bikegoesbaa

        Please, explain further.

        You can start with an example of an engine that is more reliable long-term with a turbocharger than the NA version in the same application.

      • 0 avatar
        jmo

        You can start with an example of an engine that is more reliable long-term with a turbocharger than the NA version in the same application.

        That’s not the question. The question is the previous generation more or less reliable than the current generation. In most cases it is due to the continued development of material science, metallurgy, casting, machining, etc. technology.

    • 0 avatar
      srogers

      I think that you should consider that the vast majority of people who were buying Korean cars in past years did so because they were cheap. I doubt that they have lavished dealership visits and weekly detailings on their discount purchases. These buyers also expected to suffer greater than average depreciation, further reducing their motivation to invest in maintenance. In short, these were purchased as disposable cars and treated as such.

      In contrast, anyone buying a popular Honda or Toyota probably paid a premium price for it and expected great longevity and resale value as part of the experience. An owner wanting to protect that investment would likely be treating their car more carefully than a typical Korean car buyer would have.

      We can’t effectively judge the robustness of Korean vs. Japanese cars until they are both judged worthy of the same level of investment into maintenance by their owners.

    • 0 avatar
      gslippy

      The 01 Elantra I bought in 09 has 161k miles on its original engine and A/T. It’s a great 3rd car.

    • 0 avatar
      bd2

      Putting aside that Hyundais and Kias of today are not the same as those from 10, much less 15 years ago, the other big factor is SALES VOLUME.

      The typical driver puts 12-14K miles per year on the odo – so for most cars w/ 200K miles, we are talking about model years from 12-14 years ago.

      In 1998, Hyundai sold a whopping 14,144 units of its best selling model, the Sonata.

      Toyota in that same year sold 427,308 Camrys (heck, Toyota sold more units of the LS – 20,790 – than Hyundai sold of the Sonata).

      We’re talking of a ratio that’s greater than 30:1.

      It’ll be like asking today how many Suzuki cars are on the road with 200K miles?

      “The difference is that the Japanese (and to a lesser extent US and European) automakers have proven that they are capable of building a car that has a very high chance of going 200K miles reliably. They may or may not be doing that today, but they’ve demonstrated that they can.

      The Korean automakers haven’t proven that they’re able to do it at all.”

      - For some years now, Hyundai’s long term reliability has been rated a good bit higher than Nissan’s by both JDPower and Consumer Reports (some years even bettering Infiniti on JDP).

      And according to Germany’s AutoBild which is regarded to have the most comprehensive analysis of reliability in the industry, in their latest reliability ranking, Hyundai rated no. 1.

      Also, in countries like the UK and Australia, Hyundais are a popular choice of fleet managers b/c they are regarded as being able to take the abuse fleet vehicles get.

      • 0 avatar
        jmo

        In 1998, Hyundai sold a whopping 14,144 units of its best selling model, the Sonata.

        Toyota in that same year sold 427,308 Camrys (heck, Toyota sold more units of the LS – 20,790 – than Hyundai sold of the Sonata).

        That, sir, is a very good argument.

      • 0 avatar
        aspade

        How many cars did Subaru sell here in 1998? More than Hyundai did, probably. But not by any 20 or 30:1 like the Camry. 2:1 maybe?

        Cars.com shows 260 90s Subaru listings with over 100K miles. Page after page of cars in the $5-6,500 range.

        There are 52 90s Hyundais with over 100K miles. A whopping 3 of which were listed over $4,500. Good luck with that lol.

        If you like Hyundai now that’s one thing, but those cars were junk. You’d make excuses for them but you for damn sure wouldn’t own one.

      • 0 avatar
        bd2

        The ratio for Hyundai to Subie sales was around 2:1 for 1998.

        The 1st pretty decent Hyundai was the 3rd gen Elantra (2000-2006) which Consumer Reports has praised for its reliability and Hyundai’s reliability didn’t start to really rise until the quality program initiated in 2001, so yeah, the Hyundai cars prior to that were subpar.

        But one also has to take into account that Subarus were fairly expensive for their time (due to the cost of having an AWD system) and that people tended to keep better care of their Subarus than the significantly lower priced Hyundais.

    • 0 avatar
      M.S. Smith

      “Try and find it on Craigslist” is not actually evidence.

      If you want to make a blanket claim that Korean cars make it to 200K less often, then provide some study, survey, or other credible source.

      Otherwise you’re just talking out of…well, where the sun don’t shine.

  • avatar
    Mandalorian

    Korean cars are like knock-off luxury good. They look similar to Japanese, are named similar, and come from the same continent. But make no mistake, they are not the same.

    I will admit the new Sonata and Elantra have a lot going for them, but I am not convinced they will hold up well over time.

    Look at how many old Subaru Wagons are one the road, old 4Runners, old Camrys, and then look at how many old Hyundai/Kia?Daewoo you see.

    • 0 avatar
      jmo

      As I mentioned above their is some reason to believe that H/K have been improving reliability/durability over the past 13-15 years while Toyota and Honda have been decontenting.

      But, we won’t know for sure for another couple of years.

    • 0 avatar
      srogers

      This is an abridged version of what I already posted above, but wouldn’t Subarus, as a prime example -due to their keenly loyal clientele, be more likely to be cared for in expectation of a long life?

      If someone has a 10 year old Subaru that needs $2000 worth of fixing, and another person has a 10 year old Kia that needs $2000 work, one of these is going to the junk yard, and the other is going to get fixed and driven and fixed again when necessary. We’ll never know how long that Kia might have lasted, because, at that point in time, no one would think that it was worth it.

      It’s a self fulfilling prophesy – if a car is bought as a disposable car, most buyers are unlikely to continue to invest in keeping it on the road. Next time, they’ll either buy something that they perceive as better or they’ll junk it and start over with another disposable car.

    • 0 avatar
      bd2

      Again, how many cars did Hyundai and Kia sell 12-14 years ago? (Nevermind Daewoo).

      Not even close to the volume of that of the Japanese.

      Plus, as already stated, buyers of Hyundais and Kias back then didn’t exactly put $$ into maintenance.

  • avatar
    philadlj

    Nothing at all.

    The new base Nissan Versa sedan (I’ve affectionately nicknamed it “Littlewheels”) lists for $11,750 including destination and handling.

    Hyundai and Kia no longer have anything in their corral that can undercut Littlewheels. Fortunately, I don’t think they need to, but nor would it hurt them to retake that cheapest-car beachhead.

    To do so, I’m thinking they’d have to bring over the tiny H10. Never make me a Hyundai product exec, because I’d have it renamed the Excel and sell it a couple hundred less than Versa’s pre-destination $10,990 pricetag.

    Because Hyundai has excelled.

  • avatar
    tparkit

    How much of a discount is useful? For now, just enough to get people to visit the lot and take a look at what has become a quality product. Fortunately for H/K, Honda is giving its once-loyal client base reasons to go elsewhere.

    But I think the discount will be temporary — because the other carmakers will drop down to where H/K is. The US economy is imploding, a trend which will accelerate as Europe deteriorates and China’s national ponzi scheme meets its inevitable end. Carmakers figured this out some time ago, and that’s why we see cars like the fully-equipped Ford Fiesta: a small, tricked-out vehicle to sell to a permanently poorer society.

    About all the US has left is hiring by the federal government, and income distribution via “stimulus”, U.I. extensions, a food stamp program which is growing with astounding speed, and stealth bailouts via Washington-guaranteed debt forgiveness for “homeowners” and students. The finances of the individual states and municipalities are in a self-reinforcing spiral of decline, and non-federal governments are cutting programs and shedding hundreds of thousands of jobs.

    The end of the party is in sight. We are nearly out of money, and that includes spare cash and credit for all those expensive cars we’ve been buying. Enter H/K, the right company at the right time. At the top end, the Genesis is going to be looking pretty good to folks newly nervous about forking out for a Lexus.

  • avatar
    Pahaska

    [quote]My impression is that most Korean cars, compared to their Japanese competitors, are competitive overall but rather lacking in engine refinement, especially when compared against Honda or Toyota,[/quote]
    Funny. The Tau in my Genesis has been one of Ward’s top 10 engines for at least 3 straight years. Deservedly so in my opinion. Smooth. Quiet. Just put on 550 miles of Texas Hill Country at 70-75 with a pump measured 26.7 mpg. Not bad for a big car with a 375 hp V8.

  • avatar
    VanillaDude

    They are already as good as what is built by Toyota, Honda and Nissan. There is no need for a discount, except for closed minded buyers who won’t drive anything but their Japanese cars.

  • avatar
    david42

    The discount is the warranty. After they build reliable cars for two decades, they can afford parity (price/features/warranty) with the Japanese. Though by then, the Japanese may have lost their “Japan premium.”

  • avatar
    don1967

    Price and content got me into Santa Fe in 2008, ending 20+ years of Honda and Nissan loyalty. But when we recently sought to add a compact car to our fleet, we shopped around extensively and for us it was Elantra regardless of price.

    Both Hyundais have been so rock-solid for us that Japan Inc. would have to discount its products to get a serious look from me now.

  • avatar
    200k-min

    Discount?!? How about more expensive for a Hyundai these days. When I went out to check out the 2011 Sonata’s they were priced higher (all be it slight) than comparable equipped Camcords. Loaded up Sonata was going for about $28k – no incentives – “you are lucky they we have one on the lot” says the saleswoman.

    That same day Ford had a loaded SEL 4cyl Fusion for just under $25k with $2000 cash on the hood. Sales guy said he’d let it go for $22k and I wasn’t even dealing. Options were nearly identical to the Sonata at $28k.

    The real test is driving all these models a year or two used. Old Hyundais still drive like beat up rental cars. They don’t hold up like a Honda/Toyota. Also, Honda had the best 4cyl motor in the field (By FAR IMHO). Hyundai is unrefined under the hood. For these reason they shouldn’t be priced the same as their Japanese competition.

    With the Fusion having a $6k price advantage over the Sonata there is no way I’d even consider Hyundai. Same price as the Ford, I’d give it serious thought.

    • 0 avatar
      M.S. Smith

      I agree with 200k-min. This post should have been written three years ago. Right now, there doesn’t appear to be any significant discount applied to the Korean brands at all.

      According to Truecar, neither Kia nor Hyundai is among the top five most discounted brands, and they have only on entry in the top five most discounted cars (the Sedona).

      http://blog.truecar.com/2011/10/18/october-truetrends-greatest-discounts/

      We can speculate all we want, but it appears that the consumer has already spoken.

    • 0 avatar
      darex

      Fusions are basic and boring and I know you’re full of it when you say it had similar equipment to the fully-loaded Sonata. Fusions aren’t available with many of the creature comforts found in the Sonata, and the quality of the plastics in the Fusion are utter garbage.

      There’s no comparison and the Sonata SHOULD cost more than any Fusion.

      The Fusion is the Tempo of this decade.

      • 0 avatar
        200k-min

        Fusions aren’t available with many of the creature comforts found in the Sonata

        Can you please list what those are? The Sonata had a panoramic sunroof which Ford didn’t offer. Creature comfort? Maybe, but that’s not going to get me to buy a car. On a similar note the new Sonata had a push button start which Ford did not. That doesn’t change a thing about the overall vehicle, but if you’re into the latest gadgets I think the Sync system in Ford would win over that. Otherwise the two cars I compared were 100% identical in the options list, including how soft the plastics felt.

        Honda and Toyota have near identical options too. Overall the entire segment is competing between the 40 yard lines on the football field. Nobody is a standout IMO. The debate is over what’s the best deal for your money. Warranties don’t sell me, especially for a premium price, but a 20+ year reputation does have an influence. Hyundai doesn’t have the long term rep. Nor does Ford, but at least they had prices to reflect that fact.

  • avatar
    StatisticalDolphin

    Measured by residual value, Hyundai is middle of the pack. This is an improvement, they used to be abysmal by this measurement.

    Here is a list of Japanese nameplates with higher residual values: Toyota, Nissan, Mazda, Honda and Subaru. Subaru tops the list, btw.

    So, by this metric, Hyundai has improved and is ahead of the soft targets, the American and most of the European nameplates (except VW). The question is can this trend continue? In my opinion the Japanese will not be so easily defeated, they have much more at stake.

    So says Mr. Market.

  • avatar
    Robert Schwartz

    Twice in the past couple of weeks I have seen a new car in the distance, and thought that it was one of the new Jaguars. Both times it turned out to be a new Optima.

    I am very favorably impressed.

  • avatar
    eldard

    Someone on another site said: Korean = 90% Japanese quality-wise at 70% of the price. That’s good enough for me.

    • 0 avatar
      dolorean

      90% Japanese quality at 70% of the price? Your argument is H/K is the blue-light special at K-Mart for cars?

      That’s not an argument for quality. Ford made a similiar argument for the Grenada back in the ’70′s, that it was nearly a Mercedes, which TTAC has lambasted in many an article. So you’d buy an H/K because its ‘nearly’ an Accord or Camry? Why not spend a little more for the real thing? Or better yet, buy an off-lease Accord with all the options you want with a warranty and save the money.

      • 0 avatar
        eldard

        Who’d be moronic enough to believe that a Ford can be a Mercedes?

        Last month I bought a mid-end Samsung phone because the Sony Ericsson was $20 more. I blew the savings on branded clothes on sale. It was worth it! Sorry Japan. You’re not gonna get any money from me. Unless you lower your prices accordingly. lolz

      • 0 avatar
        Signal11

        Samsung exceeded Sony on quality and capability in mobile phones some time ago. (Not counting the PSP phones.)

    • 0 avatar
      JCraig

      Korea is the new Japan. Young people don’t realize that Japanese cars and electronics started the same way, as crap. It took years of development for the Japanese to meet then exceed American products. The same transformation is occuring in Korea, they are waking up to the realization that they can not only build things as good as anyone, but also innovate. It’s happening in heavy industry, cars, electronics…

  • avatar
    mnm4ever

    I think all of you are giving the general public way too much credit here. The “discount” nowadays is styling. Hyundai and Kia are putting out some really great designs, and that is whats bringing in the buyers. Toyota and Honda have a stellar reputation, but thier product is SO boring!

    As for the quality arguement, aside from Honda/Toyota/Nissan, no one else has a significant advantage there. The domestic brands have basically just as poor a reputation for longevity, especially for small cars.

    • 0 avatar
      dolorean

      Agreed. Toyota hasn’t been more than an appliance since the Supra and Honda since the Prelude. Both have given up on excitement building instead word-of-mouth quality assurance. Still, as boring as most Toy/Hon’s are they, unlike the Korean makes, are a known quantity, which in this instance is a quality all its own.

    • 0 avatar
      eldard

      LIke I said just a few days ago in another post, HOnda can learn a lot from Audi (and BMW). Just make your products aesthetically pleasing even though they’re really just gussied up crap VWs. Make it good looking, and they will come.

  • avatar
    JCraig

    Purchased my second Hyundai new in 2008, which has been flawless for the 50k miles I’ve put on it. The price, warranty and loyalty rebate were huge factors in my decision, although I felt it compared well to the competition that year. I was never a fan of the Civic’s styling, the Corolla was already dated and didn’t justify the price difference, and the domestics at the time had nothing compelling. At this point I consider Hyundai a standard brand and their new crop of products proves the point, as they have low incentives and cannot keep up with demand. As I eye the Genesis coupe and Veloster (turbo) as a possible next car price and incentives will not be much of a factor, and the warranty is just gravy.


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