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Posts Tagged ‘Era of Value’

On a trip to San Francisco a while back I rented a Hyundai.  They pulled up this eggplant colored piece of crap and I winced.  A Hyundai?  So, it’s going to be one of those business trips I said to myself.

 Wasn’t there anything else, I ask?

Nope.  That was it and I’d already waited in line long enough.  So I got behind the wheel and took off down the expressway.

A few hundred miles later, dropping it off at the airport, it wasn’t that I regretted parting with it, but I did have a new found appreciation for this automobile.  Maybe because it was easy to locate in a “sea of rentals” that I became enamored with its quirky color and bonded with this machine which had absolutely no rattles, good sound insulation, decent handling and excellent gas mileage.  That’s right, a Hyundai.

I remember when people started showing up in Santa Fe’s a decade ago, I thought they were just too cheap to buy a Honda CR-V.  Or a Toyota RAV4. That’s how the public knew someone was a cheapskate, they bought a Hyundai. A Korean car.  But that was before Samsung became the new Sony.

These days I no longer wonder why Hyundai has made major inroads into the American automobile market, it’s inexpensive and it’s good!  Why waste all that extra money on a shinier nameplate?  Seems the brand is no longer tarnished and people don’t think twice about buying a Hyundai.   They want something good, at a fair price, and they’re beating a path to the Korean manufacturers door. 

And spare me the old school thought that lowering prices devalues the product.  People aren’t resisting Hyundai’s because they’re too inexpensive.   Hyundai markets the Genesis, an almost as good Lexus/Acura/Infiniti for almost ten grand less.  This is the era of value. Rather than insist that the customer come up to your price point, come down to his.  Meet him halfway.  Show that there’s a partnership, the same way Hyundai agreed to let you return your car if you lost your job.  An idea so good, other manufacturers imitated it.

IF you agree that Korean manufactures have made dramatic inroads with automobiles, is the motorcycle industry and specifically Harley-Davidson touring bikes next to feel the value-based heat?

It would seem so.   Because Georgia-based Hyosung Motors America Inc., a division of S&T Motors, a Korean motorcycle manufacturer is applying value pressure on the heavy-weight cruiser segment.  Foreign-based companies typically complete final assembly operations in the U.S., and according to First Research, the U.S. motorcycle manufacturing industry has a combined annual revenue of about $6B with touring and cruiser motorcycles accounting for 67% of the overall industry revenue.  Clearly that is where the competitors interest will be targeted.  At the Chicago stop of the International Motorcycle Show, Hyosung unveiled the 2010 ST7 cruiser and also display it at Daytona last week during Bike Week.  The ST7 is a classically styled cruiser that is a belt-driven, fuel-injected, has front and rear disc brakes and powered by a liquid-cooled 678cc DOHC V-twin with eight valves. Hyosung claims a maximum torque of about 46.5 ft.-lbs. at 7,500 rpm. And here is the best part.  MSRP is $7,299 and you can pick any color as long as it’s black, red or white.  If my HP 12c financial calculator is correct that’s about $10,000 less than what it would take to maintain brand loyalty with H-D.

One could assume Harley-Davidson is ‘tone deaf’ if they don’t hear Hyosung Motors riding up from behind, but I’ll bet they are reverse engineering one as I write this.  The Korean company is dedicated to making its mark on the international motorcycle market as a globalized brand that is conveying a brand connotation of “fashion, high-tech and elegance” while presenting sophisticated and elegantly made products with excellent price and performance.  They are the “Hyundai of motorcycles.”  It’s not a matter of if, rather when will it impact H-D sales.

It’s a tough economy and many feel priced out by today’s motorcycle industry.  Yeah, some of us marry an Oscar-winning actress or get embroiled in million-dollar intrafamily lawsuits.  But, for rest of us we want more entertainment for our discretionary dollar.  The gulf between the industry and the public, which is sick of overpaying for everything means it’s never too late for Harley-Davidson to regain the hearts and minds of the consumer.  But it must offer good products at fair prices.  It’s really that simple.

Photo courtesy of Hyosung Motors.

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