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Car & Driver 2020 Explorer vs. Telluride Comparison


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7 hours ago, CKNSLS said:

 

What puts a "hole" in your theory is that many of their models have been priced (inc. rebates) thousands less than the competition-for the last decade or more. So-according to your theory they would be losing money across the model lines-yet continue to stay in business. Don't think your theory is valid.

 

(Can someone say "Legacy costs?)

 

Back in 2017 my new Santa Fe (XL) Limited was $5,000.00 less than the Toyo/Honda equivalent.  

 

Also how much support are they getting from the SK government and other business deals that make their home market easier for them to compete in. US manufactures are kind of at a disadvantage in the far east with certain products. 

 

Not sure what Ford's foot print is in SK, but i'm assuming Kia/Hyundai may have an advantage there and competing in the states price wise

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1 hour ago, fordtech1 said:

Not to pick at a scab, and I’m sure this has been discussed many times. However, I’m curious to see what the cost to build difference between the Korean/Japanese automakers and domestics. Meaning, overhead. 

 

With the new labor contracts from 10 years ago, the labor cost difference is minimal. 

 

Although I wonder how much it costs them to negotiate and manage the UAW contracts.   I would imagine it's not insignificant.

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2 hours ago, HotRunrGuy said:

 

Maybe what we're starting to see is a change in business philosophy, where profitability is more important than volume? Less volume means less plants, less employees, less overhead. It's certainly OK for a company to sell less of a product, at a greater profit, than more product with less profit/vehicle.

 

HRG

 

I guess you missed the memo.  Hackett publicly stated many times that Ford was going after a 8% - 10% profit margin and products that couldn't contribute to that would be eliminated.   That's why we're getting more premium products like the mustang GT500 and BEVs and Baby Bronco and Bronoc and the Aviator GT.  

 

Last time I checked Toyota was around 4%.   I would assume the SK brands are in the same range or lower.   Combine that with government assistance in SK and currency exchange rates and it's easy to see why they're priced lower in most cases.

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I did some research-the SK Won is roughly 1000= .85 cents on the dollar.

 

The 2020 Sonata in Korea goes for ~33 Million Won or ~$28K USD from an article I pulled up, not sure of the options but that was the highest number listed.

 

On a side note, they expect to sell about 70K Sonatas in the SK market this year. They sold 105K last year in the states and are at 68K for this year. 

 

The 2019 Sonata Limited in the US starts at $28K and tops out at $34K or so.

 

With that, I'd say there is some advantages they have when it comes to pricing vs everyone else. 

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9 minutes ago, silvrsvt said:

I did some research-the SK Won is roughly 1000= .85 cents on the dollar.

 

The 2020 Sonata in Korea goes for ~33 Million Won or ~$28K USD from an article I pulled up, not sure of the options but that was the highest number listed.

 

On a side note, they expect to sell about 70K Sonatas in the SK market this year. They sold 105K last year in the states and are at 68K for this year. 

 

The 2019 Sonata Limited in the US starts at $28K and tops out at $34K or so.

 

With that, I'd say there is some advantages they have when it comes to pricing vs everyone else. 

 

I'm no expert but I think the exchange rate comes more into play when taking US profits back to SK or sending parts or imported vehicles here.

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I have a friend whos a mechanic at a Hyundai dealership.  Things aren't as "rosy" as we might see it portrayed by the media.  Right now they are doing a "Customer Appreciation Program".  Replacing specific 20.L Turbo engines that are seizing up because an inherent issue when built.  What he does say is they have much leeway when it comes to replacing items. IN other words, corporate isn't giving them a hard time. It's easier to just replace the part than try to fix the part. the vehicles do not age that well. Chrome-like decor that peels off, buttons that wear off, doors that thunk tinsy-ly sagging struction, but as he tells me "people feel comfortable with the long warranty and just "feel" they are covered, and we "cover just about anything to get repeat business". As well as "well they lend to people with bad credit, so otherwise they are getting a new vehicle they couldn't anywhere else". I believe some of their higher ratings are just based on customers having things taken care of that otherwise would have been a struggle with another manufacture.  Maybe H/K are focused more in customer experiences as Lexus does.

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6 minutes ago, ANTAUS said:

Maybe H/K are focused more in customer experiences as Lexus does.

 

Sacrificing profit for market share seems to be expensive but effective. Losing money in order to kell the competion sometimes works. I see people buying Hyundais that used to buy cheap Dodge, Chevy, Nissan, Isuzu and Daihatsu cars.

 

How long it can work is another question.

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56 minutes ago, akirby said:

 

I guess you missed the memo.  Hackett publicly stated many times that Ford was going after a 8% - 10% profit margin and products that couldn't contribute to that would be eliminated.  

 

That strategy works for me, as long as the dividend stays at 6%, and the stock price is > $9.

 

HRG

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3 hours ago, silvrsvt said:

 

Also how much support are they getting from the SK government and other business deals that make their home market easier for them to compete in. US manufactures are kind of at a disadvantage in the far east with certain products. 

 

Not sure what Ford's foot print is in SK, but i'm assuming Kia/Hyundai may have an advantage there and competing in the states price wise

 

Not to mention Hyundai has their whole separate infrastructure (shipping, infrastructure, I think metal, etc) that they can also shift costs to/get sweetheart deals from.

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57 minutes ago, akirby said:

Last time I checked Toyota was around 4%.   I would assume the SK brands are in the same range or lower.  

 

Profit margin (Net income as a % of Net revenue) for global automakers from their latest annual reports.

  • Toyota 8.49%
  • Ford 2.30%
  • Hyundai 1.70%
  • Kia 2.13%
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15 minutes ago, rperez817 said:

 

Profit margin (Net income as a % of Net revenue) for global automakers from their latest annual reports.

  • Toyota 8.49%
  • Ford 2.30%
  • Hyundai 1.70%
  • Kia 2.13%

 

We know those numbers are skewed for Toyota and Ford in the US.  Ford does a bit better and Toyota probably does worse (last time I checked anyway).   Probably the same for the koreans.

 

When you don't really have any products that are desirable on their own you have to underprice the competition especially in the commoditized markets where they primarily compete (with a few exceptions).

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14 hours ago, 02MustangGT said:

Not sure what your point is?   Hyundai built a vehicle that is priced right and is making a profit.  

 

My point is, how do you know how much margin they have in these vehicles? It seems like they are taking Nissan approach to price/volume, which is risky. 

 

9 hours ago, rperez817 said:

I agree, but it's not something that's needed on any current model year Hyundai or Kia vehicle in the U.S., as none of them use timing belts. To clarify, one 60k mile maintenance operation is to inspect the serpentine drive belt. Not necessarily replace it. Pretty much just like what other automakers specify.

 

It is interesting that Hyundai, Kia, and Genesis still offer the best new vehicle warranties in the U.S. market, even though they don't need to. Those three brands are now the most trouble free according to J.D. Power IQS 2019.

 

2019088a.jpg

 

JD Power initially quality is kind of useless. I'd be more interested in how many Kia/Hyundai's are on the road after 10 years. If you think they are great value and good quality, then by all means buy one. They can have every option as a much more premium car but how do they get the price so low. Some from labor, some from SK government, and some from poor engineering? 

 

I don't mind people having a different opinion of these two utes, but I think they have been grossly over-hyped as the luxury SUV's that undercut the non lux crowd. I don't think their powertrain/FE is anything to write home about. Yet, that has been glossed over as, a cheap price and nice interior seems to be the winning factor in the media's eyes. I doubt a couple thousand dollars is really going to stop someone from getting a limited vs XLT. Maybe it will to the subprime thousand aires? We shall see what the consumers think and how it all plays out.

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4 minutes ago, jcartwright99 said:

We shall see what the consumers think and how it all plays out.

 

Well said jcartwright99 sir. In the case of 2020 Ford Explorer, it will be interesting to see how much Explorer sales decline in the next 12 months due to its botched launch, design and engineering flaws,  "premium" pricing, and increased competition (especially from Kia Telluride and Hyundai Palisade).

 

I think the strength of the Explorer nameplate combined with Ford's high owner loyalty will help soften the blow to sales, especially after the launch issues at Chicago Assembly Plant are finally worked out.

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1 minute ago, jcartwright99 said:

 

What flaws are these? I keep hearing manufacturing issues, nothing suggesting that that their was an inherent engineering/design issue.

 

The design and engineering flaws are primarily with the interior, chassis tuning, and powertrain refinement. Here are some examples that Car and Driver mentioned in its most recent comparison test. https://www.caranddriver.com/reviews/comparison-test/a29516727/new-3-row-suvs-compared/

 

Chassis tuning: 

"you'll find an unsettling discombobulation between the axles in response to anything other than the smallest steering input. Jerk the wheel to dodge a chunk of truck tire on the freeway and a moment passes before the rear end follows suit."

 

Powertrain refinement:

"the 2.3-liter surges and lags like the highly boosted engine working against a lot of mass that it is"



"at full whack, the mufflers emit a buffeting sound as though someone had lowered a rear window without cracking a front"

 

Interior:

"the Ford's interior isn't designed so much as cobbled together. In the Kia, no surface was overlooked. In the Ford, it seems few were looked at."

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15 minutes ago, rperez817 said:

 

The design and engineering flaws are primarily with the interior, chassis tuning, and powertrain refinement. Here are some examples that Car and Driver mentioned in its most recent comparison test. https://www.caranddriver.com/reviews/comparison-test/a29516727/new-3-row-suvs-compared/

 

Chassis tuning: 

 

 

 

Powertrain refinement:

 

 

 

Interior:

 

 

 

I don't think one review, of material and tuning preferences is anything related to and engineering or design flaw. Engineering flaw example, DCT's. Material usage is not that. Suspension tuning/smoothness is a preference

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5 hours ago, silvrsvt said:

 

Also how much support are they getting from the SK government and other business deals that make their home market easier for them to compete in. US manufactures are kind of at a disadvantage in the far east with certain products. 

 

Not sure what Ford's foot print is in SK, but i'm assuming Kia/Hyundai may have an advantage there and competing in the states price wise

 

The only subsidize I can find by the SK government is for work on their Hydrogen powered cars.

I'm sure you are aware that Hyundai is a major corporation-

https://en.wikipedia.org/wiki/Hyundai_Motor_Company

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47 minutes ago, CKNSLS said:

 

The only subsidize I can find by the SK government is for work on their Hydrogen powered cars.

I'm sure you are aware that Hyundai is a major corporation-

https://en.wikipedia.org/wiki/Hyundai_Motor_Company

 

These subsidies are not always public.   Asian governments are notorius for subsidizing their home companies selling products to other countries.

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5 minutes ago, akirby said:

 

These subsidies are not always public.   Asian governments are notorius for subsidizing their home companies selling products to other countries.

 

 

This is great. There are now $11,000.00 sign on bonus (more legacy costs-if you will) and the Koreans must have something else going on to be able to sell a product people want-far less than Ford (and others). So obviously-there must be something THERE to not make it a level playing field.  I know there are some intelligent people on this board-so I really should have to say anymore than what I have already said to point out the obvious.

 

 

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2 minutes ago, CKNSLS said:

This is great. There are now $11,000.00 sign on bonus (more legacy costs-if you will) and the Koreans must have something else going on to be able to sell a product people want-far less than Ford (and others). So obviously-there must be something THERE to not make it a level playing field.  I know there are some intelligent people on this board-so I really should have to say anymore than what I have already said to point out the obvious.

 

Signing bonuses are just another way to divvy up the same pie.   Take away the bonus and they get more salary.   Take away the salary and they get less benefits.  It's just a shell game.

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10 hours ago, akirby said:

 

I guess you missed the memo.  Hackett publicly stated many times that Ford was going after a 8% - 10% profit margin and products that couldn't contribute to that would be eliminated.   That's why we're getting more premium products like the mustang GT500 and BEVs and Baby Bronco and Bronoc and the Aviator GT.  

 

Last time I checked Toyota was around 4%.   I would assume the SK brands are in the same range or lower.   Combine that with government assistance in SK and currency exchange rates and it's easy to see why they're priced lower in most cases.

 

This is the second time this has been stated. I googled this and found nothing.(Well I did find they had a subsidy for Hydrogen development) I guess maybe if we post it enough times it might be true?  Then it was stated "it's all secret subsidy". I mean I guess anything is possible.......

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13 minutes ago, CKNSLS said:

 

This is the second time this has been stated. I googled this and found nothing.(Well I did find they had a subsidy for Hydrogen development) I guess maybe if we post it enough times it might be true?  Then it was stated "it's all secret subsidy". I mean I guess anything is possible.......

 

Not South Korean, but Japan

 

https://www.mema.org/japan’s-automakers-want-government-help-even-tariffs-hold

 

Akio Toyoda, who serves as the president of the Japan Automobile Manufacturers Association and is CEO of Toyota Motor Corp., told Trade Minister Isshu Sugawara that he welcomed the pact, but said the industry “faces extremely difficult challenges,” citing a stronger yen, an impending hike in sales tax and other uncertainties

 

Currency manipulation (take the link for what its worth, since its backed by American Automakers)

http://www.americanautocouncil.org/currency-manipulation-101

 

http://www.americanautocouncil.org/content/aapc-statement-korus-negotiations

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