Whenever I get into a discussion about the Hyundai Equus, often as not, the Phaeton -- Volkswagen's ill-fated 2004 attempt to build their own high-dollar luxury car -- will come up in comparison. Hyundai, the argument goes, has no more business building a Mercedes-beater than Volkswagen did, and the Equus will suffer the same fate.
My take on it is that the Equus and the Phaeton are two entirely different kettles of fish. Here's why.
The Phaeton was, for its time, a true high-end luxury car. Prices started around $85,000 and could climb north of $100k, and one could argue that it was worth the money. The Phaeton had had everything from an air suspension to navigation to an available twelve-cylinder engine -- cutting-edge stuff at the time. It was as fine a car as the S-Class or the 7-series, and I talked to several Los Angeles limo drivers who told me that they (and their passengers) preferred the Phaeton to the big Mercedes and BMWs.
Supposedly, a Volkswagen executive once said that the only problem with the Phaeton was "the Volkswagen badge on the hood and the Volkswagen badge on the trunk." And he was right. When Most of the people to whom I showed the Phaeton agreed that it was worth the price... until they found out it was a VW. To a person, their reactions changed to "What? I wouldn't pay that much for a Volkswagen!"
But the Equus is in a different situation. Hyundai isn't charging $85,000 to $100,000 for it -- they are charging $60 to $67k, which, if you base the car on size and amenities, is actually a pretty good deal.
Where the Equus differs is that it isn't a true high-end car. One of my criticisms is that it lacks any real cutting-edge technology. So while the Phaeton was a high-level, high-dollar car from a mid-level manufacturer, the Equus is (by luxury car standards) a mid-level, mid-dollar car from a low-end manufacturer.
The Phaeton sank in the US because it didn't match America's image of the Volkswagen brand. Back home in Europe, where VW has other brands including Seat (youthful and sporty) and Skoda (cheap and cheeky), the Volkswagen brand had moved upmarket, and the Phaeton made more sense. Not here.
The Equus is actually in better shape, because it fits what a lot of people expect from a Hyundai, which is good value-for-money. Even people who still think that Hyundai makes crapmobiles (and believe me, they don't) will generally acknowledge that Hyundai does deliver a lot of car for the money.
The Equus' problem is that there are a lot of good luxury cars for $60,000 -- and if you're willing to compromise a bit on size (and with gas prices as high as they are, who isn't?), you can choose from several really nice cars for that kind of dough. The Equus is simply at a tricky price point. It's much easier to make a case for the Genesis, which is basically a $50,000 car with a $40,000 price tag. $60k is harder to justify.
To be fair, Hyundai doesn't expect to sell many Equii. These guys aren't stupid; they see the car's limited appeal, and that's probably why it lacks some of those high-end features, and why the suspension is tuned for Korean tastes rather than American. Hyundai knew it wasn't worth investing the money for the limited sales the car will generate. And yet it is selling in reasonable quantities, and I imagine Hyundai is making a healthy profit on each one.
After a couple of years, the Phaeton left the market with its tail between its legs. Resale value plummeted, and a used Phaeton (if you can find one) is considered by many to be the luxury-car bargain of the decade.
I don't think that will happen with the Equus. I think it will sell in limited numbers to those who love a bargain. I think it's resale values will remain fairly strong (as is happening to all Hyundai models).
I think what Hyundai is doing with the current Equus is laying the groundwork for something better. The economy is picking up steam, and when happy days are here again, Americans are going to celebrate. If Hyundai can design a new Equus -- one that is as truly ground-breaking as the Sonata and Elantra, one that drives properly, and one that has features that high-end luxury buyers really want -- and if they time it right, they could wind up with a big hit.
Or maybe it'll be just another pillow-mobile designed for business men on the far side of South Korea's generation gap. You never know.-- Aaron Gold
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Photo © Tropical Bob Bowden
If Hyundai designs a new Equus replacement – and changes that awful name!!
I have to agree with what someone on the preceding write-up said with regard to Hyundai and luxury cars: If Hyundai wants to play in the luxury market, the first thing they need to do is develop a whole new line of cars, with a whole new Brand name. The Phaeton may have been a true luxury car in every sense of the word, but, what killed it in the U.S. at least was the VW badge. Same with Hyundai.
I also disagree with your comment about the Sonata and Elantra being “ground breaking.” Beyond a much more aggressive style than Hyundai had previously been known for, there is little else about them other than the exclusive use of 4 cyl engines that I would call ground breaking. There is very little new technology, and Hyundai certainly was not the first car maker to use the “4-door coupe” body language.
Add to this that with all the new designs, updated quality, and newfound love for the brand, prices are now starting to go up to Honda and Toyota levels. Some might argue that this is OK now that they are on a level playing field with the two mainstays. I can say that I’ve heard a lot of grumbling about the price increases, and statements to the effect that former buyers will no longer consider them due to price alone. This is telling about the brand’s image. Hyundai is still considered a maker of bargain priced cars. As long as that image remains, very few will consider paying $60K + for a Hyundai.
First comment after viewing the Equus, it will never sell as long as they build the Genesis, which is without doubt the best car I have ever driven. The Equus, though beautiful, is overpriced, and not built for this market.
I think another difference you overlook is that the Equus is competing more with American and Japanese luxury sedans than the Europeans. VW based the Phaeton on the A8/Flying Spur platform, and therefore had a solid place to start to make a sedan along the likes of a 7 or S. Hyundai started from scratch with a car that competes with a Lexus LS or (god forbid) a Buick.
I think Hyundai’s strategy has become clear in the last 7-8 years. They engineer a car that meets its competitors’ sophistication about the time a new generation of the competitors come out and knock the Hyundai back down a rung. The next time they redesign that same car, it’s ground-breaking in the segment, even if no new technology is used. See the last two Sonatas and Elantras for evidence. I think the current Genesis is the next example of this philosophy, and so is the Equus. They take a home-market car and throw it at the Americans to introduce us to the concept of a rear drive higher-priced Hyundai, and the Genesis has done well as a G37/GS350 competitor, but it’s not up to snuff against the E or 5 from Europe. I fully believe the next Genesis and the next Equus will show us ‘mericuns what the Koreans can do.
As for the comparison to the Phaeton, you’re absolutely right…different goals entirely. As a VW fanboy, I’m shocked to hear the next Phaeton is coming here, and that it will be just as high-end as the last one. I’ll be happy to pick a used one up, but no way can I see paying $100K for a VW. I’ve become one who tells people to shop Hyundai, though, when they ask my advice. I think anyone looking for a compact or midsize sedan or CUV should look at Hyundai/Kia before even thinking about Honda or Toyota (and I have driven multiple of both of those brands in the past too).
By the way, the Phaeton started around $65K in 2004 for the V8, not $80K, but the W12 did start at around $95K. Crazy!
http://www.motortrend.com/auto_news/112_news040120_phaeton/
Agreed Ken, with the Genesis the Equus has no raison d’etre. They could simply upscale the Genny and not bother with the Equus marque. I think this could be an ego thing, stating that they’be made it to the big time…kinda their Maybach. Unfortunately, you’ll probably see as many Equii as you do Maybachs.