In the war for car shopper’s money, Hyundai may have unleashed a weapon that will sway buyers to their side, and that product is the Venue. It’s not exactly the first of its kind, nor is it especially unique, but it will certainly be a compelling option for buyers in the market for an entry level vehicle. Hyundai, like many other automakers these days, is pinning its future on crossovers. And by creating the Venue it may have reinforced the establishment of a burgeoning segment in the process.
With the demise of inexpensive cars like the Ford Fiesta and Chevrolet Cruze, and the expectation that more subcompact and compact cars will be cancelled in the near future, people have questioned how automakers will retain shoppers interested in new vehicles in the sub $20,000 range. Hyundai may have that answer in the form of its upcoming crossover, the Venue. Although Hyundai currently has the Accent on hand for entry level shoppers, sales of the subcompact decreased by just under fifty percent between 2017 and 2018.
Obviously those customers didn’t get snapped by Thanos or something. They’re still around and they’re buying something other than diminutive sedans. That realization prompted Hyundai to develop the Venue. The Korean automaker’s thought process was covered by Automotive News several days ago, and the article explains how the company fought their instinct to develop an all wheel drive system for the Venue in order to deliver a vehicle with a lower starting price:
“O’Brien said the decision to pass on awd was critical to the larger mission: creating an alternative to entry-level cars on the outs with consumers, and digging down into the market of used-car buyers who really want something new, that looks like an SUV and has modern safety and tech features. About a third of the 40 million used-vehicle transactions last year, he said, started with a buyer looking for a new vehicle and striking out. That’s a big target audience for the Venue.
When you make all-wheel drive, you have to have larger axles and larger hubs and larger suspension components, and all those things cost money,” O’Brien said. “The easiest thing for product planners to do is to add. Nobody resists you. ‘Oh, add it, add it, add it.’ And then you have to pay for it, and then the product becomes difficult to afford,” O’Brien said.”
Basically, Hyundai developed a vehicle that can serve the dual role of capturing customers who would normally switch to a used vehicle and the ones who want a new car but are not on board with something like an Accent. It certainly sounds like a recipe for success if it’s priced right. With the Kona boasting a starting price of $21,035 including shipping, the little crossover can comfortably occupy the $5,000 gap between the Accent ($15,915 with shipping) and the Kona with a base price of approximately $18,500, which would make it less expensive than the competition and within the realm of a fully loaded subcompact car. It’s official price will no doubt be influenced by the cost savings realized by ditching an all wheel drive system.
Of course Hyundai doesn’t plan to just offer the Venue without any compelling features. Aside from the now ubiquitous safety tech like automatic emergency braking and forward collision alert, the Hyundai will come standard with an Android Auto and Apply CarPlay interface, a piece of technology that is important to younger buyers and one that isn’t always available on competitor’s base trims.
A denim inspired interior is also available to Venue customers. The inclusion of such a unique upholstery option is similar to the strategy that Nissan employs with the Kicks, only in that particular case the oddball equipment is a set of headrest mounted speakers.
I had the opportunity to experience the Venue at the 2019 New York auto show. I’d say the automotive intelligentsia were right to put this at the top of their respective lists of the best vehicles that were at the Javits Center.
It’s a funky little crossover that boasts a nice interior, and that’s not even taking into account the denim seats, which feel like the real thing and are amazing. That kind of quirkiness will almost certainly win over some buyers.
Of course quirkiness doesn’t exactly guarantee success. And despite what the executive in that piece wants everyone to think, the Venue isn’t the first of its kind. The Ford EcoSport is similarly sized and has been around since last year. The Kicks is Nissan’s answer to the same question Hyundai was asking when it developed the Venue, even if it is almost a foot longer than the Hyundai. There’s also the Kia Soul, which will likely be priced similarly to certain trim levels of the Venue. These competitors may prevent the Venue from being a massive hit, but the introduction of this mini crossover is no less significant for it. And it’s a likely predictor of exactly how rival automakers will approach the sub $20,000 new car market in the age of the crossover.
Related Reading:
“Hyundai Venue’s Goal: Redefine Entry Level” – Lawrence Iliff, Automotive News
“Future CC Outtake: 2018 Nissan Kicks – The Crossover Revolution Will Definitely Be Televised, With The Kicks Leading The Charge” – Edward Snitkoff
And in case you were wondering what that title was referencing, it is this song. That is definitely a NSFW link.
I may completely wrong about this, but it looks like a reskinned Kia Soul to me. GM had the Sloan Ladder. Maybe Hyundai, with two brands, has a step stool?
Agree. Didn’t Hyundai have one of these already?
I was surprised when I first heard about it, thinking, “Well, they already have the Kona under the Tucson and therefore they have a subcompact crossover.” But when you think about it, a Kona is pretty much the same size as an i30 (Elantra GT) hatch. There’s room underneath.
It’ll be interesting to see how they advertise it, to see how Hyundai sees it, where it fits in – and how buyers respond.
I know, right? Just last year there was a post talking about the dearth of Hyundai SUV’s. Now we have
Palisade – about to be released
New Santa Fe
Tucson
Kona
Venue
That’s as many as pretty much everyone else and if anything among a narrower spread but covering about 90% of the market overall. The only thing missing is a large Body On Frame such as Tahoe/Suburban but that’s not really Hyundai’s thing. Maybe for Genesis but why bother, just make a fancier/different Palisade akin to Telluride at Kia, which is basically the same but looks very different. Easy enough to slather on the leather. If they ever release that little SantaCruz trucklet that’ll be yet another niche item.
Looks to me, they have another hit. Few need all wheel drive and the extra expense continues without end.
True. In Australia, Mitsubishi no longer sells the AWD version of the ASX. People who need AWD don’t tend to go for this class of ‘car’.
They don’t? Wow, I didn’t notice. I really should pay more attention to the best-selling car in its segment but I just find them so bloody boring…
I only noticed because we have an ASX. And they did away with the diesel as well, which was packaged with the AWD. Guess the take rate was too low.
It’s interesting what you referenced about buyers looking for a new car and striking out and then going used. I myself was looking for a used car very recently and couldn’t find anything that was compelling enough at a decent price point with a realistic balance of asking price vs mileage/age and thus found myself going new instead and finding it to be a far greater value. I didn’t find it worthwhile to still pay 80% of new price for something already past the warranty period but also didn’t want to pay peanuts for something with intergalactic mileage and then worry about stuff needing fixing. It did help to have an extremely open mind and not lock myself in to a particular shape or brand and decide what would really work for me, myself, and solely I instead of everyone or anyone else in society. Strange times we live in.
I think this will do well, but think (my opinion only) the Kicks looks better for the same or very similar money. I have no doubt that either (as well as the Soul) would be very capable of delivering a very good dollar to miles driven ratio over the lifetime of the vehicle if not as good as the same thing in a different form factor (such as the mentioned Accent). But if not held forever by the first owner this will have a better resale value than the Accent or Versa or Fiesta or whatever.
As interest rates go up, the price goes down to keep the payment affordable, this is making for some interesting vehicles becoming available. And used vehicle rates are generally even higher, so…
PS – My inlaws recently bought a base-ish Kona and love the thing. I took my FIL and his walker to look at the Kona, the Kicks, the Niro, and the Soul on Xmas day when the lots were closed but some of the cars were still unlocked. He then came back a few days later and picked the Kona. And had the dealer add leather as he wanted it to feel more premium but felt that the standard equipment on the base Kona was much more than he was used to in his old Camry so no need for a higher trim level. They ditched the Camry which was hard to get into at their age and their not so old Forester sits in the garage as the Kona gets better mileage and is apparently more “fun” to drive for a pair of 70-somethings notwithstanding what the “reviewers” say about the non-turbo version that they have.
I had a similar experience in the used/new market this past year when we bought our minivan. We started off looking at used minivans, but the going price for a 2-yr. old, 20,000-mi. Sienna/Odyssey/Sedona was often about the same price as a well-negotiated deal on a new one.
It didn’t make sense to us to buy used under those circumstances, so we bought a new one. I don’t know if the same thing holds true in all vehicle segments and in all geographic regions, but for us, buying used didn’t make sense this time around.
Interesting your comment about ‘notwithstanding what the reviewers say’. The older I get, the more I realise that a car only has to be better that what you drove before. Whether it’s class-leading isn’t the issue for most buyers. It just has to pass the ‘Is it better than my old one?’ test, without having any features that instantly make it a ‘no-sale’.
My car has all sorts of niceties and creature features but is a base model The manual describes all the things it hasnt got and I cant say I’d have a use for them anyway, the book that describes the sat nav infotainment car phone sytems is quite large, I have a navman cellphone etc and the stereo is great and easy to operate.
Old Pete and KB,
You’re both singing my song!
RE: how automakers will ‘retain customers’ who want to spend $20,000??? LOL, $20,000 out the door price for a ‘new vehicle’ will soon go the way of the 10 cent parking meter in NYC.. Tell me, if automakers are making record profits and selling more $50,000+ Vehicles than sub $25,000 Vehicles then why must they be concerned about this lower income group that can’t qualify for a purchase of over $15,000….
also here is another option – BUY A USED (aka preowned certified used vehicle), you can find at least a 10 year old Toyota Corolla for $9995 with less than 75,000 on the odometer.
I drive a 2012 Honda Accord that is paid off with 60,000 miles on the clock. when I get this urge to showboat I can just rent something that costs $50,000 for the weekend or now with TURO there are more options
It’s not just whether you can or cannot qualify. People don’t necessarily want to spend more.
It seems you believe car comapanies develop cars for the benefit of prospective buyers. But here’s a news flash: if there’s profit to be made, they’ll build it. The price point is irrelevant.
You are not a customer, at least in the eyes of an OEM. If you don’t buy new, they don’t care what you want in a car. They sell to people who buy new, and once that transaction is completed, they try to sell another one to that person a few years later.
The used car market is of no concern to OEMs. Dealers love used, as they are almost always profit monsters. They buy cheap, sell for near book value or higher. The CPO only covers creampuff cars, usually ones taken in off lease, and you will be hard pressed to find a CPO 10 year old car with less than 75K on the odometer. A quick online search today (5/13/19) shows none available, with the oldest ones being from 2014.
I get that new cars cost a lot. They are usually better optioned in base configuration than a similar but high end car from 10 years ago. The safety and conveniences are better, as is the performance and economy figures. And we like old cars on this site.
But for all that, people want new cars or SUVs or trucks and many are willing to be under heavy debt to own one. There is a feeling that buying new brings to most people. What was previously the 2nd largest purchase most people made in their life is now probably the first, as fewer are purchasing homes. As long as people want new, they will continue to buy them.
“The used car market is of no concern to OEMs.”
Sadly, this is true. I have always believed that if a manufacturer’s management could extend its horizon out beyond the end of the next quarter, the used car market should be their focus. With a high quality car resale value will jump. The cars will be in demand. People who know nothing about cars will buy them because “they are good” and used buyers will pay more for them for the same reason. This means lease rates can drop because of the higher residuals and the bonus is that juiced sales/leases of new cars will not depress the otherwise strong resales. Cadillac used to benefit from this scenario, and so did Chevrolet once upon a time. More recently this has been the Toyonda view.
Of course there will always be the short sighted idiot who follows who says “we can cut $300 out of components and materials per unit and nobody will be any the wiser.” Quality takes a dive and so do resale values. Chrysler under its last two owners seems to have perfected this outlook. Or maybe since K. T. Keller retired?
Competing with used cars on price/value is getting harder and harder right now since we’ve exited the supply-desert of C4C+’08-’10 years. Looking around for kicks to see if there’s something that could tempt me out of my wife’s 85k mile 2012 Camry, it is fairly trivial to find something like a 20k mile ’17 Optima LX or Sonata SE for $13k. That is an astounding amount of almost-new car for the money. How someone would pick that cracker-box Venue over a comfy midsize sedan is beyond me, but I know that many many would.
Or in other words , Hyundai creates a new niche, called a Station Wagon!
Seriously though, I’m interested to see how the non-4wd CUV works out here, sales-wise. In my opinion, 4wd is overrated for a great many people, and since it carries significant costs, ditching the 4wd is seemingly sensible, especially for models in lower price ranges.
On the other hand, some cars just look like they ought to have 4wd, and its absence — even as an option — could seem weird. I think the Venue is on the borderline here. From what I’ve seen here, I think Hyundai is on the right track with this car, so I’m curious how the market responds.
I don’t see many of the FWD-only Kicks or C-HR in the Northeast. It seems like people just go for their larger, AWD siblings. Are they selling better in the Sun Belt?
I do see the Niro around, but people buy that for fuel economy, not perceived all-weather capability.
Here in Virginia (not the Sun Belt, but closer to it than the Northeast), I see a fair number of Kicks but fewer C-HRs. I would love know how these models sell in other regions.
It could just be what the dealer stocks too. Here in the snow belt the dealers simply don’t stock the FWD version in any significant numbers, so everyone gets AWD because that’s what’s available. While I’m not got to argue that AWD isn’t a benefit in winter driving, you can still get by with FWD just fine.
Same goes with trucks and SUVs. The RWD variants are almost non-existent up here.
Barbed wire grille is kind of cool.
It’s interesting, but reminds me of a window-mounted air conditioner.
Reminds me of a Volvo XC40. An $18,500 crossover that looks much like one twice its price should be a good seller. On the other hand, will the contrasting roof trend be looked back in a decade the same way Altezza lights or landau roofs are now?
Well the black roof trend is dumb in a hot climate. Our Mini came with a black roof, and even in cool southern Australia it got unbearably hot on anything other than a winter’s day. So why did we get the black roof? The car was a contest prize, and that’s the way it came. I will admit it kinda looked cool, but the hot interior soon overrode the coolness factor.
And our perverse fascination with black leather interiors boggles my mind too. Yes, sure, my car has one but I bought it used. I don’t know if it’s a chicken/egg thing — do automakers only offer black leather because people don’t want anything else, or do people only buy them because that’s all there is on offer?
All I know is cars in the US have been much more consistent in offering at least a beige option in most cars.
I’ve been looking at used Grand Cherokee Summits lately. Gorgeous brown leather interiors available in the US. What are all the Summits here equipped with? Black interiors. I saw an Overland with a gorgeous cream interior, I almost felt like plonking down money right there because when am I going to see another one?
Cloth is a much nicer seating surface, leather is for truck interiors where a hardwearing workspace material is required, thankfully nobody told the Japanese and the Isuzu I drive for work has cloth seats with a reasonable air ride facility.
A white roof is a Mini tradition. If you still have it get it repainted.
Very much a part of Mini tradition, but the car’s gone now. After two years of fun, it just became too much of a struggle to get in and out of such a low vehicle. We’re not so young anymore, so I had to wave goodbye.
With that egg crate grille and lack of trim it reminds me of a ’58 Studebaker Scotsman wagon (CC here), another low priced new car going after used car buyers.
Hope it sells better than the Scotsman.
It looks like a Hyundai version of a Kia Soul which it probably is.
The Venue is smaller in every dimension than the Soul, and unrelated.
Denim seats? Once more AMC was simultaneously way ahead of its time and way behind the curve when they were still around.
The AMC Levi’s seats didn’t feel anything like real denim though
They were denim “look” vinyl in our Levi’s edition CJ-7.
An ” N ” version is supposed to be on the way.
Fact is there is no such thing as affordable car today, new or used. Where is all the $50-300 dollar cars I bought and flipped in the very early 1980″s? Either in a museum, or crossing the block at Barret-Jackson, or Mecum. And I sure as hell is NOT going to pay $9000 for a well used 5-10 year old Toyota Corolla. Toyota’s are so over rated, don’t get me started. My Chevy LUV’s (Isuzu built) were far better than any of the Toyota’s I owned.
I don’t see anything in this post or on the Hyundai website about power. If it’s based on the Accent chassis and shares the powertrain, it’s effectively a replacement for the recently discontinued Accent hatchback. I really have no beef with that. But it seems like all the manufacturers are slicing the CUV market into thinner and thinner slices of the same pie.
I just see it as automakers doing with crossovers what they already did with “regular” passenger cars. We had A, B, C, D etc segment cars, now we’ve got the same for crossovers. We had hatch, sedan, wagon etc variants of cars, now we’ve got upright and coupe-esque crossovers. Etc etc.
I do think this will sell.
I know a lot of folks scoff at Hyundai and Kia or point to the Excel or the Sephia as reason not to consider a Hyundai or Kia. But those 2 cars are irrelevant in 2019.
The point is that Hyundai and Kia offer a lot of car for the price.
True,they have a lower resale value to a Toyota or a Honda, but for most folks (such as folks like my dad and mom), who drive vehicles for years until the wheels fall off, who cares about resale value. Plus the long warranty.
What is not noted here is that you can get a Hyundai/Kia at substantial discount off MSRP. I got my 2018 Elantra for just under $17,000 after all the happy horse crap(taxes and fees). The car was listed on the sticker as MSRP of $21,000. My Elantra has all the bells and whistles(such as power windows,locks, remote entry, apple carplay, satellite radio, bluetooth, 7 inch touch screen, USB and the ability to unlock/lock/start my car via Alexa and my phone).
As for the Kona, they are everywhere in Columbia and everyone I have talked to love the car(my neighbor especially)
I have not seen many of the HR-V around here. Probably because Honda never sells a car below MSRP and for what the thing costs, it is not worth it. It is easier to spend a bit more for a CR-V
Whenever I hear people bash Hyundai/Kia, I just switch off. They clearly don’t pay attention to the new car market and haven’t updated their perceptions since 1996.
Car for car, I’d take any Hyundai or Kia over, say, an equivalent Nissan. And I haven’t heard anything overly concerning in recent years about quality and reliability. How else can Hyundai/Kia justify raising their prices incrementally over the years?
Fact is, they make good cars. Period.
My dad’s last car was a new Euro-spec 2006 Hyundai Accent. He liked the idea of buying a Korean car, and had heard good things about Hyundai. Obviously not a frivolous car, but it had luxuries such as remote keyless, rear back-up warning sensors, new to him, and A/C and power windows like his last Ford in the US.
It replaced a 17-yr old 89 VW Golf, also purchased new.
During the Accent’s 10 year stay, with all of…25,000 km (the Golf racked up about 160,000 km over 17 years), the Hyundai was fairly reliable, but not as trouble-free as the Golf.
It did have more bells and whistles.
When I visited and commented on ‘what a nice car’, my mother, not an auto enthusiast or expert by any means, noted, “maybe, but it’s ‘jumpy’ on the highway, not smooth like the VW”
Pretty interesting observation from the passenger side, since the VW was a little noisier, and required windows down (no A/C) in summer. Also, the VW had been hit hard while parked in the street, and had some pretty major body work when it was 9 years old.
My dad’s sole comment was “it seems a little slower” 1400 fuel-injected, catalyst vs a carbureted 1780cc motor with no emissions controls.
Don’t read any car comments on Yahoo! Any article on for example Buicks gets comments about old men and some crap one someone had 30 years ago. For a while there were a lot of Buick articles, like on the totally not your father’s Buick Regal/Opel Insignia TourX.
Come to think of it Yahoo comments are often half ignorant on any topic.
The Honda dealer for example in Greenfield MA sells everything for a bunch under list price with hardly any prodding. The Honda dealer in nearby Northampton is a lot tougher. So, each dealer seems different pricewise even in the same area.
The HR-V is on a Fit platform, and despite the space utilization features like the Fit it is quite substandard in NVH. The CR-V is OK that way.
This will sell. It looks great inside and out and Hyundai knows how to make a good car.
As I was telling you on Messenger, Hyundai isn’t even bringing over the new Accent to Australia and the European i20 is long gone. This means Hyundai will be offering the Venue as their cheapest offering, a little more expensive than the Accent but still under the psychological $20k barrier (for context, the cheapest versions of compact/C-segment cars were traditionally priced at $19,990 a decade or so ago). There’s more pressure on the Venue, therefore, to perform here than in the States where it’s just another option in the Hyundai lineup and they have the price-leader Accent in showrooms too.
I agree with your assessment regarding the Venue having to perform better in Aus then in the USA.
However I think the advent of the Venue in US Hyundai showrooms spells the end of the Accent.
I got to know the sales manager of the Hyundai dealer I bought my car from and he stated that a majority of folks that come into that dealer ready to buy a Accent actually leave with a Elantra or Kona. I do believe him because Howard County Maryland might as well have the Elantra as the official car of the county as they are everywhere.
I actually went to the Hyundai dealership intending to buy a Accent as a daily driver/commuter car and was steered into a Elantra instead. It was only a little bit more money to get an Elantra(which the EPA classifies as a midsize car due to interior volume) over a Accent.
A woman who works delivering cars parts managed to clock up 1,000,000 miles in a Elantra, Hyundai swapped her a new car for it,
I dont know of a better low cost car.
I can take or leave (well, leave) the Elantra sedan, but there isn’t a bad line on the Elantra GT hatchback.
Leon, I’ve found that some Hyundai dealers don’t even bother to stock Accents anymore. Or they have a couple, but only to show you how, “for another 20 bucks a month” (typical 4-5 year loan) you can get into the much nicer Elantra.
A few months ago I wrote a rental-car review on an Accent, and my conclusion was that owing to Hyundai’s rebate structure, the Elantra was <$1000 more and there really wasn't a reason to buy an Accent.
Maybe that's why Avis had a whole row of Accents for me to choose from 🙂
I agree Evan
A look at my local Hyundai dealer shows 8 Accents in stock ranging from $10,794(MSRP $17,974) for a base SE to $13,402 (MSRP $20,255) for the top of the line Limited.
By contrast there are 117 Elantra in stock
They range from ether $11,033 (MSRP $18,180) for a base Elantra SE with a 6 speed manual trans or $11,938 (MSRP $20,039) for a base Elantra SE with auto trans to $20,109 (MSRP $27,789) for top of the line Elantra Sport.
Looking at both the sale price and MSRP price, you can see that for only a little more money, a person can get an Elantra. There really is no reason to buy an Accent over an Elantra.
Looking at the gas mileage according to fueleconomy.gov, the Elantra is rated at 28/37 with a combined 32. The Accent is rated at 28/38 with a combined 32. So the Acccent gets 1 more MPG highway. However that is offset by the Elantra having a 14.0 Gal tank over the Accent’s 11.9 Gal tank.
In experience, I usually get about 400 to 405 miles per tank and it cost between $35 to $45 to fill up.
I also think the Elantra is stealing sales from the Sonata too.
I would pick an Elantra over an Accent too for the resale. The Elantra will give back that $1,000 at 100,000 miles that you spent on it.
As the big three have been rushing to kill all their passenger cars, because they can sell an SUV built on the same platform for $4,000 more, I have wondered what happens when everyone is building several different SUVs in the hundreds of thousands each, the market is flooded, and it occurs to someone to try and undercut the other company’s prices?
In India, the Compass is selling at about half the rate it sold in it’s first year, ranking 10th among SUVs. Two different tests comparing the Compass to a Tata, Mahindra and Hyundai agree the Compass is well built and drives well, but costs way too much compared to the others.
In China Jeep sales are being hammered, adding a 40% sales drop this year to 2018’s 30%+ drop.
In Europe, Renegade and Wrangler sales are holding up. The Compass only in it’s second year, is adding a lot of sales, but the Cherokee and Grand Cherokee are selling a fraction of the number they sold 4-5 years ago. Road tests I have seen from a Brit and a Pole complain loudly about how overpriced Jeeps are.
So, what happens to the companies that have walked away from market segments of anything not an SUV, surrendering volume in the process, to chaise the segments with the fattest gross margins, when those segments are flooded with competitors and those fat margins are eroded by vigorous competition?
“So, what happens to the companies that have walked away from market segments of anything not an SUV, surrendering volume in the process, to chaise the segments with the fattest gross margins, when those segments are flooded with competitors and those fat margins are eroded by vigorous competition?”
You mean the Big3? They retrench, lose even more market share, focus exclusively on large pickups, and lobby the US Government for a decree that makes each month only 28 days long, thus adding a 13th month to the calendar so that they can have one more “It’s Truck Month Sale!” in every year, i.e. 13 of them per year.
If passenger cars can’t be produced profitably by some makers, then there isn’t any magic math that states that those makers have any inherent cost advantage over the status quo just because the new hotness is raised up a bit and has a rear hatch. As you infer, someone will eventually get the itch to raise volume by lowering prices and those with a lower cost basis will be able to lower prices more while still remaining profitable.
If Ford makes $200 on a Fusion and $3000 on an Escape but Toyota makes $2000 on a Camry and $4800 (same $2800 difference in profit margin) on a RAV4, the math does itself…(these numbers are purely speculative and pulled from my hat but Ford states that Fusion doesn’t really make money and I’d guess Toyota still makes money on the Camry, as do the other “imports”.)
It’s not really more expensive to build a slightly higher CUV than a sedan and with all the prices rising it opens up a slot for a lower-priced offering. Nissan and Hyundai aren’t offering these in order to lose money…but I don’t see Ford or GM really that interested in selling their offerings (EcoSport, Trax) in the segment, it doesn’t play to their strengths.
If Ford makes $200 on a Fusion and $3000 on an Escape but Toyota makes $2000 on a Camry and $4800 (same $2800 difference in profit margin) on a RAV4, the math does itself…(these numbers are purely speculative
Lets make it more interesting. Say Toyota and Hyundai price their C segment crossovers at the price point where Ford and GM said they were losing money on the Focus and Cruze. The market sets the price, so now GM and Ford start losing money on the Equinox and Escape, so they abandon those models to stop the red ink, and shrink more. Then Toyota gets the Explorer in it’s crosshairs. and so on up the product line.
But they can’t shrink their overhead fast enough to keep ahead of the loss in volume. They don’t have the money to buy back stock fast enough to prop up EPS.
The FCA Q1 report makes for interesting reading. In China, they dropped all the Fiat passenger cars about 3 years ago and went all in on “high price, high margin” Jeeps. But everyone and their cousin is bringing new SUVs to market and Jeep has lost over half it’s volume in the last couple years. In their Asia/Pacific region which is mostly China, they went from a profit of 10M Euros last year to a loss of 9M Euros this year. In Europe, Jeep is still growing, thanks to the Compass, but they are letting Fiat rot. Fiat is most of their volume. In Europe, they went from a 220M Euro profit last year to a 19M Euro loss this year.
Meanwhile, FCAs two big ATP and margin plays other than Jeep, that were supposed to make Fiat irrelevant? In Europe, for the first two months of this year, Alfa sales are down 36.6% and Maserati is down 31.9%.
I’m not picking on FCA, it’s just that I happen to follow it closer than GM or Ford. I am sure Ford and GM are in the same race to maximize average transaction price and gross margin that FCA is. I give Marchionne credit for getting in front of the trend to SUVs, but FCA, and the others, need to come up with a new trick, because the biggest vehicle makers in the world are zeroing in on the segment where they bet their companies. When the time comes that the only things in a Ford US showroom are an F-150 and a Expedition, while Toyota and VW dominate the rest of the world, will Toyota and VW sit back and say “nah, we aren’t going to use our global resources to go head to head with the F-150 and Expedition”?
It looks like this one is priced only about $2500 (not $4000) above the Accent, keeping the “out the door” price below $20k in most states. Additional cost of building it is still probably a fraction of that, so the margin is there.
The “U” in CUV is utility and that is why a boxier vehicle is more appealing to most than a sedan. Young families have to deal with car seats. That is a big one. You can also carry more “stuff”. Think road trips, sports equipment, etc.
Comparing this type of vehicle to a Jeep misses the point. We can argue semantics but an SUV is another class altogether, AWD, 4×4, truck-based, etc.
If demand switches back to sedans, the changeover on the same assembly line is easy, FWD unibody platform with different sheet metal and interior.
Part of why this car exists is that its length does not exceed four meters, which means it benefits from reduced excise tax in India when equipped with a petrol engine under 1200 cc or a diesel under 1500 cc. It’s sort of like a more flexible version of Japan’s Kei classification for minicars. The Kona is more than four meters long and competes in the next class up. (It does sound like the North American Venue will get a bigger engine than the Indian model, though.)
As far as I know, the only other Indian-market four meter car to come to North America is the made-in-India Ford EcoSport. Its strange proportions and tiny 1 liter base engine make more sense when the benefits of its configuration in the Indian market are considered.
I was trying not to write another “Ew, another fugly crossover thingy” comment again. But I just got through reading the ’85 Calais write-up’s comments and all of the vitriol thrown at it’s looks. Is it uglier than this thing? Really? Denim seats? A small television glued to the dash? Come on!
Am I in the Twilight Zone? It’s okay if I am. I like all three versions…
I liked the Calais and it’s stepbrother Achieva. Between the two of them, I owned 3 N cars.
No, I can’t take the exterior seriously either, though it does deserve some credit for the ways in which they have not failed to include every current feature (or awfulizer). Floating roof at back, blacked out A-pillar, Clint Eastwood-looking-into-the-sun eye slits (and if those aren’t the lights, then the next cliche of square-assortment-ones-still-in-the-packaging-from-Bosch), duo-tone mirrors, a different coloured roof, a faux-expenso nameplate in separated chromey letters on the tail just above a different coloured faux-diffuser stuck on it’s ass.
They could certainly never say, “Did we miss anything?”, not for want of trying anyway.
It’s not for me, then.
But ah, I must be truthful – I really don’t think that N-body from the other day was much chop either, with a bunch of tawdry plastic missteps peculiar to US cars of THAT era (and stiff-backed rear windowed GM cars as well), so there my mileage varies.
Oh, and I’m ok with the interior here too. Except for the denim, I mean, jeans are terrific because (if bought wisely) they don’t squash the plums, they’re kind-of vaguely acceptable anywhere and they last long enough that lazy non-shoppers like me can avoid the shops for long periods. But on car seats, smothered by many a sweaty ass for long periods? They’d surely get very whiffy like some old uncle’s jeans, though admittedly, one probably shouldn’t ever be driving with just undies (or less) on the denim in the car.
Well said, Justy, and very funny.
I’d prefer the original Citroen. But if you can get a “denim inspired interior” I’m all in. I’ll trade in my Gremlin Levi’s Edition.
The Citroen comment had more to do with the last photo of a Kia, which has no description. The Kia equivalent? The Citroen they copied:
I’m glad Hyundai and Kia are ready to exploit the uneducated millennial. For every one of these bozo mobiles sold a G70 gets its wings
I see the appeal. Hyundai and Kia have been making cars that present very nicely for awhile. It looks to me like it will do well.
But that name. Isn’t dealership another word for Hyundai Venue. Rent a white one for your nuptuals and you have a Wedding Venue. With the right sound system you have a Music Venue. At trade-in time, will it be Change of Venue? I wonder if their publicists are hiring . . . . 🙂
If they are, venue would not be the person to work wiv them, mefinks.
But yeah, that name. Fingernails on a blackboard. Oh, I get that it’s a happening, a destination, somewhere you dress up for and go out to, it’s a party, and so on. But still no. It sounds like the product of intense focus-group research, it sounds as if clever people have had many meetings, in short, it sounds contrived (in other times, it would possibly have been the Hyundai NightOut). It grates for that reason. Please don’t patronise me, Madam Hyundai, it’s a little transparent.
Ofcourse, it won’t really matter a damn. That became clear from the moment that folk started happily shelling out for a Daihatsu Charade.
No, “Venue” is a real word, which means as a car name it’s not a product of intense focus-group “research”. It would be Venua or Venuu or VenuX in that case.
Ah, yes. How very true. Or tRuu.
Here in Brazil it is called Hyundai Creta. The front and rear treatmets are very different, but the side view is same car. For me, this is a reskinned Hyundai Tucson. Hyundai would never trow that platform in the trash bin. Take an old Tucson, reskin it and make a bunch of new dollars on an old platform.
The Venue does look very similar to the Creta/ix25, but it doesn’t share any panels. It’s smaller than the Creta as well. The Venue is also unrelated to the Kona, and the even larger Tucson.
Comparing overall length/wheelbase/width/height:
Venue: 158.9/99.2/69.7/61.6
Kona: 164.0/102.4/70.9/61.6
First-gen Creta/ix25: 168.1/102.0/70.1/64.2
2020 Creta/ix25: 169.3/102.7/70.5/63.8
Tucson:176.2/105.1/72.8/65.0
The seems like a current take on the Toyota Matrix/Pontiac Vibe, tailored to what is fashionable today. An inexpensive car that has a whiff of outdoorsy-ness, but is mainly about economy and usefulness for stuffing things into it.
It’s always been a good idea. I had a Vibe for years and it was a superstar for filling with all manner of oddly-shaped items. Plus it was fairly fun to drive and got decent mileage.
What this really reminds me of is Prunes.
Yes, the fruit. Hear me out.
Prunes have been around for what, centuries? Millenia? Fairly popular product, basic, but with good cred. Works well for older, conservative folks.
But what does a PR/Marketing person hear?
“It’s a product for old folks”. “Young people don’t like them, and won’t buy them”. So what do we do?
Rebrand as Dried Plums.
The old wagon is now a CUV. It costs more, and really is no different. And people still selling the old versions are doing okay, but not spending a lot of money on marketing. This is nothing but repackaging and charging more. The sad thing is that it will work.
Front lights appear to be, um, strongly inspired by those on the ’13-’18 Jeep Chicory.
The wheels in that ad look ridiculously undersized.
Maybe they just got out of the pool, like George Costanza…
Looks like a boxy design with good sight lines. They should sell many. Depending on pricing, options (sunroof!) and safety, this might be great for the kid’s first car.
Looks like a winner in the modern version of a category that used to be called “runabouts.” And don’t forget Hyundai‘s success with electrifying the Kona and Ioniq models, both sharing a platform with the Elantra. This one could get the same treatment. Overall it’s clever, efficient, bulletproof and without the styling excesses of some rivals.