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    Thread: I Hope This is a Credible Source

    1. Member EnglishPhaeton's Avatar
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      10-05-2012 01:22 AM #26
      Everyone,

      I opened the proverbial can of worms again I'm sorry, I shall say 5 hail Mary's and sbstain from alcohol for 24 hours (honest)

      But Chris, admitting you owned an AMC Even the Americans on here resolutely refused to even acknowledge even knowing of AMC Perhaps thats why companies like Hyundai et al started making cars, I guess they thought "wow even we could make something like that"!!

      So I blame America

      Stu

      ps British Leyland (Jaguar) were partly to blame too.
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    2. Moderator Paximus's Avatar
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      10-05-2012 05:20 AM #27
      But Chris, admitting you owned an AMC
      I even rented one once, a Javelin. Unfortunately it broke down in the first car park. Here it is as seen in normal life:


      image via antique-engines.com

    3. Member Victor R's Avatar
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      10-05-2012 10:38 AM #28
      Since the Hyundai Equus was brought up, Here are some sales figures:

      Hyundai Equus Sales:

      U.S. Sales:
      2011 3193
      2012 YTD (Jan - Sept) 2963
      (196 Equus sedans were sold in the United States in December 2010)

      Canadian Sales:
      2011 116
      2012 YTD (Jan - Sept) 90

      Now compare this to Phaeton Sales:

      US Sales:
      2004: 1,939
      2005: 820
      2006: 235
      (The numbers for 2003 are stated: 265 (343){?})

      Canadian Sales:
      2004: 93
      2005: 34
      2006: 7

      Is the problem not obvious? Equus sales project a year to year increase, but are still described as "modest" by industry standards. Phaeton sales were not even 2/3 of those of the Equus in the first year, dramatically dropped year-to-year after that, and the overall three year model run sales volume of the Phaeton was almost matched by the Equus in its first year alone.

      Furthermore, the price of a new Equus is not that different from that of the V8 Phaeton when it was sold here new. On top of that, as Phaetons weren't selling, they were heavily discounted.

      All of us here on this forum are Phaeton enthusiasts, and, as such, we have a perspective on the car much different than the vast majority of potential car buyers. Also, I firmly believe that our emotional connection to the Phaeton makes us not fully realize just how few of these were sold, and, even, how few are still selling (with the exception of China).

      All of the press releases and interviews note that VW's corporate plan is to offer a full range of vehicles, including a large luxury sedan. VWAG does have such cars, sold under the Audi, Bentley, Bugatti, Lamborghini, and even Porsche brands. To achieve the VW-specific goal, they need to develop a unique car to sell as a VW (i.e. Phaeton), or else they wind up rebadging one of their existing cars from other divisions, weakening that brand and those sales. Creating and re-tooling such a new car for the US market carries huge costs. Coupled with their 2004-6 experience, the risk of not recouping those costs and suffering huge losses is daunting.

      I have no doubt that VW truly aspires to be a full product line automobile company and that the comments made by their spokespersons in interviews are genuine. Wanting this and achieving this, however, are two separate things. The decision to reintroduce the Phaeton to the US will not be made by enthusiasts or visionaries, but rather by bean-counters. VW dodged a major bullet on huge losses on the Phaeton, not just in the US but also in Europe, because they were able to recoup their investments by saving Bentley with the technology developed for the Phaeton. If they re-introduce the car here and it fails again, there will be no way to absorb their losses.

      Remember, the Phaeton is going down in history as "Piech's folly". (As Ferdinand Porsche's grandson, Piech had a little more clout in the company than your "typical" CEO and was able to push his vision through to reality.) I am not sure that the CEO who authorizes the capital required to reintroduce the Phaeton here will want to go down in history the same way...

      Victor

    4. 10-05-2012 11:28 AM #29
      I'm not sure where you're getting your prices from, but the Equus looks to me to be substantially cheaper than the Phaeton was, around $60k compared to $80k, which may well account for higher sales. That being said, I don't think VW have the same understanding of the US market that the other brands do, Acura being an example, a brand that doesn't even exist in the UK. In the UK, at least, there's a much greater "desire premium" placed on the age of a vehicle, which can be identified by the registration (license) plate. In the US, that distinction doesn't exist, possibly leading to other criteria being used for such value judgments.

      These seemingly minor cultural differences are fascinating, and must be an endless source of frustration and misunderstanding the marketing departments of multinationals!

    5. Member EnglishPhaeton's Avatar
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      10-05-2012 11:36 AM #30
      I think invisiblewave has put his finger on things here, we (UK anyway) perceive VW as a relatively high quality brand, perhaps somewhere along the lines of BMW, with the more expensive models fairing well on competition to both BMW Mercedes etc.

      No doubt Americans see Cadillac as a premium brand, where most in the UK see either a strange re-badged Saab, or a pathetic attempt to emulate a big Range Rover. The general consensus on Hyundai, Kia, Daewoo (Chevy in the UK), is that they are purchased by those people who would choose a "sub prime" mortgage.

      Thats not to say that I think that the cars are poor, the new generation Kia's are very good looking and appear well put together, a little like Japanese cars improved generation on generation. However the Equus (which thankfully is not imported here) is, (IN MY OPINION) a hideous looking contraption, probably designed by a committee that never met.

      As Winston Churchill once said "we are two Great Nations divided by a common language"!

      Should I stop digging now?!!!!!!!!

      Stu

      ABSOLUTELY NO OFFENCE INTENDED TO ANYONE (Except Chris as he has a Ssangyong (presumably with fried rice)! Ironically I like the SSangyongs
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    6. Member Victor R's Avatar
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      10-05-2012 12:07 PM #31
      I'm not sure where you're getting your prices from...
      I try to stay away from "urban myths" and use data:

      V8 Phaeton MSRP:
      2004: $64,600
      2005: $66,950
      2006: $66,700

      Hyundai Equus MSRP:
      2011 Signature Sedan: $58,000
      2011 Ultimate Sedan: $64,500
      2012 Signature Sedan: $59,000
      2012 Ultimate Sedan: $66,000
      2013 Signature Sedan: $59,250
      2013 Ultimate Sedan: $66,250

      Close enough, I would say....

      Victor

    7. 10-05-2012 12:11 PM #32
      Interesting that you should mention Cadillac and Saab. Two more interesting brands in terms of cultural perceptions. I quite like Cadillacs, and not just the new sportier models, the more sedate ones are very nice to drive. BUT, the old ball and chain, who is a Texas native (and West Texas at that, for those who know what West Texas is all about), is irreconcilably convinced that nobody under the age of 70 should be seen dead in a Cadillac, even the new CTS coupe thing, which I think is a great-looking car. Saab, on the other hand, in contrast to the quirky image it has in the UK, is seen as a very up-market car here, she'd have one of those in a heartbeat!

      With regard to VW, I really don't know what the origins of either cultural perception is. They've always been regarded as reliable and well-built in the UK, but that contrasts with my experience (I owned a Golf GTI & two Sciroccos), I thought they might be a bit better than average at best. And here it's the opposite. No doubt they're more expensive to maintain than the average GM or Ford, and I think they're at least as good in terms of reliability and build quality, but on numerous occasions I've been very surprised by just how poorly VW cars are perceived here.

    8. 10-05-2012 12:14 PM #33
      Quote Originally Posted by Victor R View Post
      I try to stay away from "urban myths" and use data:

      V8 Phaeton MSRP:
      2004: $64,600
      2005: $66,950
      2006: $66,700

      Hyundai Equus MSRP:
      2011 Signature Sedan: $58,000
      2011 Ultimate Sedan: $64,500
      2012 Signature Sedan: $59,000
      2012 Ultimate Sedan: $66,000
      2013 Signature Sedan: $59,250
      2013 Ultimate Sedan: $66,250

      Close enough, I would say....

      Victor
      On paper maybe, but from what I've seen of the Equus, it's much better optioned at the base price than the Phaeton was. I don't think the original dealer sticker from my car is an urban myth! The invoice price is $71k and the retail was about 80k.

    9. Member EnglishPhaeton's Avatar
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      10-05-2012 12:29 PM #34
      We are all the subject of our own subjectiveness (love big words)!! So rather than us falling out here lets all agree, the VW Phaeton is amongst the finest automobiles ever made.

      Love and peace to everyone, including owners of Korean cars.

      Stu
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    10. Member Victor R's Avatar
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      10-05-2012 12:30 PM #35
      Most people use MSRP when comparing costs of cars. My original comment was: "the price of a new Equus is not that different from that of the V8 Phaeton when it was sold here new." I think the data I supplied validates this.

      One could go hog wild. We could not only fully option both cars but I suppose we could add inflation as well to convert 2004 dollars to 2011, etc.

      The final cost on the V8 Phaeton also included a $1300 gas guzzler tax, something the Equus is not subject to.

      What you are not factoring in, though, is how heavily the Phaeton was discounted. I am not inclined to search the forum and create links, but the data and references to this are there.

      The point I was making holds: It is not the price difference that accounts for the sales number differences.

      Victor
      Last edited by Victor R; 10-05-2012 at 01:42 PM. Reason: Cooler heads prevailed...

    11. 10-05-2012 03:13 PM #36
      A better way to make the comparison would be to look at the advertised prices. As far as I know, Phaetons were generally advertised at significantly higher prices than the Equus is, for similar levels of trim, judging by the sales stickers. There may well have been large negotiated discounts, as there no doubt are with the Equus also. Price might not be the only reason for better sales, but I'm sure it's a factor! I've yet to see an Equus advertised at the price of the sticker on my car!
      Last edited by invisiblewave; 10-05-2012 at 03:17 PM.

    12. Member Victor R's Avatar
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      10-05-2012 05:40 PM #37


      Victor

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      10-05-2012 09:38 PM #38
      As far as US perception on VW (and this is merely opinion and observation, no data sourced): VW has always seemed kind of "quirky" or "funky." People hold on to the image of the original Beetle, the VW bus, the era in which these were popular, etc. and so you must be respectively quirky or funky or a bit of an oddball to pay a little bit more and take home a VW. On the upside, they're seen as less snobby than other foreign cars (Mercedes, BMW, Audi, Volvo, Lexus) because they were never really introduced formally as a luxury-capable brand. So when the Phaeton arrived on the scene, it was sort of a "WTF?" moment. We had Golfs, Jettas, New Beetles, and Passats in 2004. This thing came out of nowhere! I guess the assumption was that VW was tossing their name in the luxury hat with little to no experience. Perhaps no one wanted to risk $60k+ on a car without a proven track record in that department. And again, I'm not sure how well VW advertised the Phaeton. In 2004, I'd wager that most folks here still got much of their information about new cars from television advertisements, rather than periodically checking out the offerings online or seeing banner ads or hearing about it through Facebook.

      VW also has very optimistic views for diesel cars in the US (and I heard reports that they will be increasing their lineup percentage), but they need to advertise. And in the advertisements, they need to explain the advantages and make it interesting. Chevy seems to be doing a good job explaining in their ads what a Volt is and its benefits (I see them all over around here). But it's an American brand, and it knows the American opinion can be difficult to bend into a new way of thinking. Many Americans still think diesels sound like semitrucks, produce black clouds at every launch, and smell putrid. They think of trucks and old Mercedes diesel cars. VW, thus far, has not done a good job of enlightening the American public on the topic. That, and the fact that they have a higher initial price tag than their gasoline counterparts, is a turn-off for Americans. We do not like to do math to figure out the initial cost might be outweighed by fuel savings later

      VW's saving grace, though, may be that they've been slowly expanding their lineup here. They've made the Jetta more "grown up," the Passat boasts some nice luxury options, and the CC has helped fill the gap between where the Passat leaves off and the Phaeton began. If a V6 bare-bones option was offered closer to $50-55k, with a decked-out V8 at the top, presumably over $70k, I think they might be able to pull it off now. And with an aluminum frame to help lighten the load, fuel costs will look more attractive to buyers also.

      It's just hard for many Americans to see VWs are cars for normal (or wealthy) adults. After all, Mercedes C class, their lowest offering, can hold its own and isn't really a "cute" car like the Beetle. Mercedes doesn't offer silly cars, and neither do most foreign luxury brands in the US, so they are taken seriously right off the bat. But VWs are just cute and quirky and for extreme liberals who live out of them, right? If I take VW seriously, I'm doing the same for a smelly, dreadlocked, Birkenstock-wearing Berkeley hippie. There is also a lot of peer pressure involved in buying a car here (ask the Chevy or Ford truck guys).

      Just my 2 cents. Sorry for the lengthy response.

    14. Moderator Paximus's Avatar
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      10-06-2012 05:22 AM #39
      That's a really interesting analysis, which is completely different from the UK experience of VW.

      We have had decades of the Golf appearing as a solidly dependable German-engineered car, with TV advertising where the story line is that the car dealer for another brand is telling a young couple to 'listen to the door shut, it almost sounds like a Golf'.

      The Beetles disappeared from view forty years ago, and the replacement just blended into the retro fashion with the Mini and Chrysler PT Cruiser. There has been a 10 year craze to rebuild VW 'micro-van' campers at vast cost as a fashion icon, anything with more than one wheel left attached being a candidate.

      So the UK VW image is still iconic, of high quality and desirable, although fragmented.

      But we still don't understand why the Phaeton wasn't a sub-brand like Lexus. Everyone knows that Lexus is Toyota, so there's still a glow that reaches down to the lesser brand.

      Chris

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      10-06-2012 06:16 AM #40
      Quote Originally Posted by Victor R View Post
      Since the Hyundai Equus was brought up, Here are some sales figures:

      Is the problem not obvious? Equus sales project a year to year increase, but are still described as "modest" by industry standards. Phaeton sales were not even 2/3 of those of the Equus in the first year, dramatically dropped year-to-year after that, and the overall three year model run sales volume of the Phaeton was almost matched by the Equus in its first year alone.

      Furthermore, the price of a new Equus is not that different from that of the V8 Phaeton when it was sold here new. On top of that, as Phaetons weren't selling, they were heavily discounted.

      All of us here on this forum are Phaeton enthusiasts, and, as such, we have a perspective on the car much different than the vast majority of potential car buyers. Also, I firmly believe that our emotional connection to the Phaeton makes us not fully realize just how few of these were sold, and, even, how few are still selling (with the exception of China).

      Remember, the Phaeton is going down in history as "Piech's folly". (As Ferdinand Porsche's grandson, Piech had a little more clout in the company than your "typical" CEO and was able to push his vision through to reality.) I am not sure that the CEO who authorizes the capital required to reintroduce the Phaeton here will want to go down in history the same way...

      Victor
      Interesting, and to make matters worse, the economic times were different in '04 that what we've experienced in recent years. F

      rom what I've seen, Hyundai is offering a stepping-all-over-themselves service. Here is where, IMO VW just doesn't get it. The Hyundai is offering a pretty premium car with premium service and a below premium price. Up-and-commers and down-sizers love this. But VW offered a premium car at a premium price with a below premium dealer experience. If they had stayed committed to the car, regardless of how low it's sales, it would be easier to bring back with full-maintenance and elite VW service including picking-up and drop-off your car from your house. There are a lot of premium cars that will do nicely, but the premium dealership experience, that's what people are paying for.

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      10-06-2012 06:55 AM #41
      That's a really interesting analysis, which is completely different from the UK experience of VW.
      Haha, yes, I totally agree! Although it is always a bit dangerous to generalize these kind of questions, not to mention be totally objective. I will say something now and am hoping I am not offending anyone. Yet I believe that my views probably represent the average "upper middle class" car buyers in Northern Europe pretty well as I've got quite a few collegues/friends in most neighboring countries. And yes, we've had quite a few discussions on cars

      Here in Europe VW is (and ever since the successors of Beetle has been) considered, as Chris said, somewhat upper middle class or semi-premium. This is a pretty high rank. Volvo pretty much lands on the same category. It definitely is closer to VW than Audi. Audi is somewhat more upmarket than VW, but buying a Passat is - for many - about as prestigious as getting a standard model A4. Skoda is the brand which fills the gap below. Everyone knows that they are - under the skin - "the same cars" as VWs but cheaper. The average VW buyer is fully aware he's paying a bit of a premium for a VW.

      German cars, in general, are highly regarded (as in everywhere I suppose). Yet VW is a tad more respected than (euro)Ford and Opel. But, generally speaking, buying any German made vehicle can be motivated by saying that "I bought it because it drives so nicely" or "It makes me feel good" or "I feel cool driving it around".

      I know this is very subjective, but in my opinion there is a pretty obvious rank from there. French and Italian are still European but "quirky" and their desirability and residual values are sinking much faster. Of course there are conoisseurs who understand the finesses of a Citroën - it is a different story.

      Japanese cars, although very popular around here and mostly assembled in Europe nowadays, are notorious for their reliability but considered to be immensely boring. Not many would brag about how nicely their new Toyota drives. And, for most average Joes, Lexus either rings no bell or is just a Toyota in disguise (my feelings exactly). Another interesting thing is, that Prius is not considered to be cool at all, it is "plasticky" and not many understand why you'd get a gasoline hybrid when you can drive a diesel for less (money and fuel).

      Now, then, we are getting to Korean manufacturers. I do have a few collegues with Kias and Hyundais. I must say that the only justification I have ever heard from them for getting the car has been "it was cheap" or "it has a long warranty". I am sure Koreans will eventually succeed in improving their image, but it will be a long journey...

      Therefore, absolutely no pun to anyone intended, I have always been quiet but kind of laughed myself when ever Korean cars and VW have been mentioned in a same forum post. I (and I believe quite a many Europeans) feel that these two cannot even be compared - it is like comparing Chateaubriand and sausages. I'd never categorize myself as a snob of any sort, but I do appreciate quality motors. I'd have no problems in justifying my purchase of any European brand. I could possibly consider Japanese, should I be looking for ultra-reliable transport, not caring at all about the joy of driving.

      But then, personally, I could never, ever consider getting a Korean car. For me, and at least for the friends I have discussed this with, they are a "forbidden fruit". It is like you'd admit that you had a dinner at McDonalds, spent your vacation on a packaged holiday in the Canary Islands, or that your Rolex is a fake... (!) It really has nothing to do with the quality of the car - i am sure Equus, for example, is a quality vehicle. It is just that... If this feeling is anything like the prospective luxury car buyers in the US felt when the Phaeton was offered to them, I can perfectly understand the end result of Phaeton's US conquer.

      Jouko
      Last edited by jkuisma; 10-06-2012 at 07:00 AM.

    17. 10-06-2012 07:49 AM #42
      All very interesting comments! It sounds as if the image of VW in the rest of Europe is essentially the same as it is in the UK, and somewhat different from their perceived image in the US. Jouko, your comments towards the end about Korean luxury cars does, indeed, reflect exactly how the Phaeton itself was viewed when it was sold in the here (US). I've heard from several salespeople at the dealers that prospective customers would come in, drive the car, love it, but decline to buy it because of the badge. Most of the US owners seem to have bought a Phaeton in spite of that, or because they don't care about the badge/image, or they value the way the car drives etc more highly than they care what their neighbours think.

      With regard to the Equus and servicing, Hyundai, from what I can tell by reading, have gone exactly the same route that VW tried to go. Only certain dealers can sell it, and there's a premium service arrangement for it (picking it up from your house, etc). However, if you read the customer comments, it looks as if they're repeating the Phaeton mistakes, I've read numerous comments complaining about the difference between their service expectations and the service they're actually receiving. Might be good news for residual values for those of us thinking about a switch, everything's teed up nicely to follow exactly in the footsteps of the Phaeton!

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      10-06-2012 09:40 AM #43
      Hyundai/Kia seem to be doing better over here than years past. I think especially in the Midwest, a car can be more of a tool than a personal item (i.e. it gets you where you need to go, but make, model, color aren't necessarily as important as price and it'll be used and abused until it dies completely or rusts apart). So why not a Hyundai for this job, especially with the warranty? And yes, I agree down-sizers or those dipping their toes into the luxury market pool would appreciate the value of the Equus. But Hyundai is still not respected here like the European brands, and the European brands can be considered kind of "frou-frou" around here I haven't run into any "buying foreign cars take jobs away from America" guys yet, but that mindset is out there as well. Funny, because Mercedes, VW, etc. manufactures in the South and employs many! And not everything on an American car is "Made in America" anyway. For instance, if I bought a Mercedes, it would probably be seen as a tedious beast (damn finicky foreign cars), but at least respected because they are seen as quality (but you should've bought a Ford). With the Phaeton, people can't really believe it came from VW. They like how it looks and all the cool stuff it does, but can't fathom where VW got its "frou-frou" from all of a sudden. Because, they make fun little cars in the Honda/Toyota price range for quirky people.

      About dealerships: At least if the one I frequent got the chance to sell and service Phaetons, I know I would be treated right. I bring the car to them when I need warranty service, and they have a Phaeton tech on staff. These guys do their best to accommodate and listen and work with me on problems, so I'd have no issue with taking a new one to them. But if I lived 50+ miles from a reputable Phaeton service location, I might reconsider. If there was one in my backyard but they didn't kiss my ass every time I went in... Well, I'm not really that kind of person.

      And don't worry about offending anyone. I once needed an unexpected rental and they were short on cars, so I could've taken the Kia Rio and been on my merry way. I waited until someone turned in a Mustang convertible (no German/Swedish cars usually in inventory). Sorry, I just couldn't do it...

    19. Moderator Paximus's Avatar
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      10-06-2012 01:33 PM #44
      Hyundai... might be good news for residual values for those of us thinking about a switch!
      Invisiblewave's comment is interesting. I tend to have bought 'arbitrage' cars, marked down because they don't fit Joe Average's snob ratings or the press get a bee in their bonnets, and so they become extremely good value (for their specifications). I guess Phaeton fits that, vs Bentley.

      Some of my others in UK over the years have been :

      • Jaguar Mk 10 (disastrous US launch, dumped)
      • SsangYong (Mercedes running gear and build operations, but brand image slated by the press and stock dumped in UK)
      • Neon (a flop in UK and highly discounted)
      • Hyundai Sonata (image disliked by UK press, but mine went the 140k course in comfort and ended up in Turkey)
      • Jeep Commander (another Mercedes but a total mismatch to UK market, or probably any market, and UK stock dumped)
      • Hyundai XG (highly respected semi-luxury Mitsubishi platform, E-class spec, but brand image slated in the press and UK stock dumped)


      ... and Phaeton (fill in this description yourself!)

      Talking of arbitrage, I wonder if there's an export market for used Phaetons to China? Shipping is cheap via empty return containers!

      Chris

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      10-06-2012 01:34 PM #45
      Next time I buy a Ford, sell your stock!

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      10-06-2012 04:21 PM #46
      Quote Originally Posted by jkuisma View Post
      It is like you'd admit that you had a dinner at McDonalds
      Careful Jouko.... don't malign our north of England get-togethers.... the coffee's quite good!

      Regards
      M

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