By Michael Goetz
While Equus has always been a big player in Korea’s domestic luxury market, Hyundai’s decision to bring the vehicle to North America for model-year 2011 raised many an eyebrow.
When it comes to North American Hyundai models, the $65,000- Equus is the most un-Hyundai of them all. Low volume. High price. It competes with Mercedes-Benz, BMW and Lexus.
Fast forward to today, as its mid-cycle revision approaches for model year 2014, and the eyebrows still seem to be raised.
Super Low Volume
For calendar year 2011, Hyundai sold 116 Equus. The same number it sold in 2012.
During the first quarter of 2013, Hyundai sold 13, down from the 25 it sold during the same three months of 2012. But according to Hyundai Canada, the slip in volume is not a situation of stalled sales – this is right on the money.
“We anticipated sales of roughly 100 annually. The Equus is meeting sales expectations,” said Hyundai Canada spokesperson, Chad Heard, via email.
If you do some simple division, that amount of volume certainly demands a different business case for the 27 Canadian dealers who raised their hands and invested to become Equus retailers.
‘Because We Can’
Steele Hyundai of Halifax, N.S., is one of those 27 Canadian Equus dealers. So far, the dealership has sold three of the top-line sedans.
“You have to look at it like a dealer or manufacturer would look at brand advertising,” says Peter Gwynne-Timothy, general manager at Steel Hyundai.
“You can’t quantify what it’s worth in dollars and cents. You just take it on faith that the more people you expose your brand to, the better it is for the brand, and for you. But to have actually counted all the nickels and dimes we earned by the sales and service of this vehicles? I don’t know if you could ever argue that you could get your investment back.”
Bob Attrell of Attrell Hyundai in Brampton, Ontario, is more succinct: “It hasn’t made me a nickel.”
By Equus standards, Attrell Hyundai is high volume. The dealership has sold about 12 units so far and has about 16 Equus service customers.
But both dealerships seem entirely okay with having the Equus around as a flagship; an example to show that Hyundai is capable of building a car that can complete with likes of Mercedes-Benz S550 and Lexus LS 460. (For the record, in 2012 those vehicles registered annual sales of 715, and 150, respectively).
When asked if Equus might be hampered by Hyundai’s decision to not launch a separate luxury brand, Heard responded by circling back to its flagship role and how it is designed to showcase Hyundai’s R&D capabilities.
“As such, a Hyundai badge is the most appropriate badge for the Equus and the Hyundai showroom the most appropriate place to display the vehicle.”
Flagship, But a Discreet One
Attrell feels Hyundai has done an “amazing” job on Equus noting he has never received a complaint about the car.
He said Equus looks impressive, has all the requisite luxury amenities, and drives spectacularly, with lots of oomph. And he should know, an Equus is his daily driver.
But whenever he’s out with the car, he says he can always count on one question from curious onlookers: “What is it?”
“They don’t advertise this car,” he said.
Hyundai, however, begged to differ.
“Strategic, targeted support (print, online ads), to appeal to its target customers, but used on a broader scale (experiential events and displays), to demonstrate the company’s engineering capabilities.”
In other words, no television or radio or other big, mass-market campaigns.
According to Gwynne-Timothy, the vehicle’s discrete image can appeal to some buyers.
“At this point, the people who buy Equus appear to be those who could virtually buy anything they wanted. They are very, very wealthy. They are not up and comers dreaming of a Beemer, then settling for a Hyundai. They are people who see the value in the car and could care less about what the label is. In other words, people that don’t have to anything to prove to anyone else.”
Angus McComb of the buying service CarCompass.ca, said he has only fielded one inquiry about the Equus, from a client who eventually settled on a Jaguar XJ.
“The Equus seems to fill an anti-snob niche for those who wish to own a luxury vehicle without the pretense,” McComb said. “Unfortunately, this niche seems too small to be sustainable and is stuck in a bit a of a Catch 22 when it comes to marketing as advertising the product works against the element of discretion that enables something to be anti-snob.”
Gwynne-Timothy added it’s great for the Hyundai brand to have very affluent people driving them. One of his Equus customers ended up ordering a Santa Fe for his wife.
“Without the Equus, it is unlikely that family would have had a Hyundai in their driveway, let alone two of them.”
Your Time, Your Place
Whether or not the volume is a hit out of the park, one aspect of the Equus story is a customer retention dream – the program to pick up and deliver the vehicle at every service occasion. Officially, the program is called “Your Time, Your Place,” and it even applies to sales demonstrations.
When service customer vehicles are collected, the dealerships also leave the customer with a loaner, usually another Equus, but it could also be a Genesis or Veracruz. And customers get their cars back with a detail service equivalent to a new delivery.
At Attrell Hyundai, they have a dedicated Equus salesperson and a dedicated Equus service writer. Attrell says these individuals exclusively arrange the pick-ups and drop-offs.
Over time they have managed to forge great relationships with these customers and know all of them by name.
Hyundai’s Chad Heard says the program has become a “unique selling proposition” and one that the company is currently studying, to possibly expand.