CONSUMERS TRADING DOWN: LESSONS FROM GLOBAL RECESSION

-relevant to P3 and sensible youths (by UMNO Youth's defnition is 18 to 45 years old)

Pic 01: ACCA Graduates' Dream Coupe?

Pic 02: I have absolutely no blinking idea why the ladies are there and obstructing the view?

Click on the HYUNDAI GENESIS commercial (I Bet you don't know how to pronounce the Brand name) :

VIDEO #1 link :

http://www.nfl.com/videos?videoId=09000d5d80e8100d

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When you think of luxury, thoughts of the usual German suspects of Audi, BMWs and Merc come to mind. But Hyundai "broke the rules" with the debut of the 2009 Hyundai Genesis at the Detroit Motor Show, USA.

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The Korean-made Genesis will hit the US sometime later this year with a price tag that stays below the magic US$30,000 mark. That is far yawning gap of US$20,000 compared to the German counterparts. Already it is gaining market share at the expense of German Marques and TOYOTAs & HONDAs aren't spared either!

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Don’t be quick to write off the Genesis just because it’s a Hyundai - Hyundais of recent times often have features that seem impossible for their relatively tiny price tags. The Genesis offers features found only in the top of the line German marques as options -adaptive headlamps, active front head restraints, stability control, 8 airbags, heated/cooled seats, a navigation system and satellite radio. There isn’t much word on the interior but according to Hyundai cabin space is larger than an E-class and a BMW 7-series and can even boast a leather dashboard.

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From the outside, the car looks very un-Hyundai like and if you didn’t see the badge you might be forgiven for thinking it was something a little more expensive. Its clean lines and new grill give us an idea of Hyundai’s new design direction, and most significant of all is the lack of a Hyundai badge on the front.

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The Genesis will come in sedan form first and then later as a coupe, with a choice of three engines ranging from the 3.3L to a 4.6L Tau V8, as well as a 3.8L model in the middle. With almost 370hp, Hyundai expects the top of the line model to hit 60 miles/ 100 km/h in well under 6 seconds. Yes, yes...quite pointless feature as we hardly need use it. But we men makes a big deal on car acceleration factor. Call us dumb, but hey, we didn't deny it.

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Ultimately, its major German competitors are priced $20,000 to $50,000 more than the Genesis, and the idea of a budget luxury car seems almost contradictory to many people so only time will tell if this was a smart move from Hyundai and whether the budget-luxury segment can carve a larger market share for itself.

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In global recession today, people are getting smarter. Why pay more for some brands when you can have the same functionality with another not so famous brand? Hyundai certainly found that gap.

Enjoy the Youtube video car critique who said, "At this price (US$30,000) you can call it anything whether an Oldsmobile or what nought, I'll buy it."

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VIDEO #2 link : http://video.google.com/videosearch?hl=en&q=hyundai%20genesis&gbv=2&ie=UTF-8&sa=N&tab=iv#q=hyundai+genesis+&hl=en&emb=0

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Emerging competitors such as Hyundai truly are taking advantage of the global economic crunch. Many people need a car, but they are trading down.

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Malaysian Scene

Perodua is experiencing roaring sales, so expect companies like UMW, MBM Resources adn TSM Global to make strong sustainable financial performance. Perodua is expecting to increase their market share. Malaysians are avid savers, cash rich if you like but they are wise and sensible in not 'splurging' in unnecessary luxury.

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TSM Global is trading at RM1.18 per share despite the fact that it has a net cash per share of RM1.52!

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Can we all too "wise up"? Why spend in Starbucks that set you back RM15 when for equivalent price in Kopitiam you can have a dinner plate, Ipoh coffee and dessert.

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Your next purchasing decision (goods or services), consider HYUNDAI's strategy.

Related Link:

http://marcusong88.blogspot.com/2008/08/external-strategic-analysis-with.html