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Old 11-22-2019, 02:41 AM   #1
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Looks like Hyundai might kill their mid engine car

Did you know Hyundai has a mid engine car in development? They do, but it certainly does NOT look like a C8 competitor. Hyundai's research and development head said that the intent was to produce a low volume halo car for the brand. The RM19 prototype has a 2.0-liter 4 Cyl turbo racing engine and a version of the wet dual clutch that is close to the one that would go into the Veloster N next year. HOWEVER, they were expecting it to be a low production niche car that would sell somewhere above the $40k mark...maybe well above it.

The C8 and its $60k starting price has forced Hyundai to re-think the car saying that, "The customer base just isn't there."

He said, "I wouldn't give it more than 50-50 at this point."

So you might not have a chance to pick up one of these for some amount significantly more than $40k:

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Old 11-22-2019, 03:24 AM   #2
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There were some here who vehemently disagreed when I insisted that the C8 would sell within a few thousand of the C7 price. They simply could not believe that a midengined car could be built and sold for this price.

The rest of this post might bore the hell out of you, so you can just accept that I knew what I was talking about when it came to the pricing or get through the following.

I have worked in Financial Accounting in various Manufacturing industries for my entire career. The cost to manufacture depends on the Capital investment (and over how many years and units it can be depreciated), the cost and amount of human labor required, and perhaps THE most important factor the Economic Order Quantities (EOQ) for the materials required to produce the product.

GM has steadily improved the Bowling Green Plant over the years but I'm not sure we have see the real reason they almost doubled the size of BG the last few years. Regardless, it was a long term commitment NOT indicating any reduction in volumes - intuitively just the opposite. Corvette's average production per generation for the C5, C6 and C7 have been a fairly steady 30-35k average yearly production. The C6 was hurt a couple of years by the 2009 recession and GM reorganization but finished up reasonably well for an ending generation.

The point is that Corvette is a pretty high volume Sports car compared to their direct competitors and even most lesser sports cars. Yes, the MX-5 outsells it, but get serious. Corvette volumes enable the EOQ for components to be provided at MUCH lower cost per part than the same part if it was for a 5000 units per year car.

Remember the Viper? Sure, it had a V-10, but the cost of the engine along with the transmission, might have been the least impacted components affected by the low number of vipers sold because the tranny was off the shelf and most of the engine was also sold in Ram trucks at the time. EVERY THING else in that car had VERY low EOQ levels and resulted in a vehicle VERY similar to Corvettes at the time, being priced 25-30+% higher than vettes.

The only component of the C8 that HAD to be pretty unique is the Trans axle. By making the DCT the only transmission, it increased the EOQ by about 15% (the # of C7 manual transmission units). The transaxle became just like the windshield; the same on every unit to be produced; THE highest Economic Order Quantity. So the DCT definitely entered into the ability to price the C8 at $59,995.

Hyundai does not believe they will sell anywhere near 30,000 "RM19"s so their EOQ is model is probably closer to that of the Viper and we know what happened to the Viper.

To a certain extent, Pricing can become a self-fulfilling prophecy. Price it where profits is good, but not greedy in order to sell more units in order to drive down the material costs per unit. Obviously, there is risk in this. But 67 years of customer winning, powerful reputation helps reduce that risk and seems to be paying off for the C8 and GM.
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Old 11-23-2019, 05:09 AM   #3
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Good explanation LT and you're right. The transaxle is the only thing different. Tire/wheel. same. Body panel, Same. Wiring, same. Lighting. same. and on and on. I understand it well
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Old 11-23-2019, 07:21 PM   #4
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Thanks Torch...and yet they did manage to throw in a pretty nice interior upgrade at the same time. Maybe because there is no hatch area to trim nicely, it increased the $ per square inch of interior budget.
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Old 11-28-2019, 11:32 PM   #5
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Quote:
Originally Posted by Longtimer View Post
There were some here who vehemently disagreed when I insisted that the C8 would sell within a few thousand of the C7 price. They simply could not believe that a midengined car could be built and sold for this price.

The rest of this post might bore the hell out of you, so you can just accept that I knew what I was talking about when it came to the pricing or get through the following.

I have worked in Financial Accounting in various Manufacturing industries for my entire career. The cost to manufacture depends on the Capital investment (and over how many years and units it can be depreciated), the cost and amount of human labor required, and perhaps THE most important factor the Economic Order Quantities (EOQ) for the materials required to produce the product.

GM has steadily improved the Bowling Green Plant over the years but I'm not sure we have see the real reason they almost doubled the size of BG the last few years. Regardless, it was a long term commitment NOT indicating any reduction in volumes - intuitively just the opposite. Corvette's average production per generation for the C5, C6 and C7 have been a fairly steady 30-35k average yearly production. The C6 was hurt a couple of years by the 2009 recession and GM reorganization but finished up reasonably well for an ending generation.

The point is that Corvette is a pretty high volume Sports car compared to their direct competitors and even most lesser sports cars. Yes, the MX-5 outsells it, but get serious. Corvette volumes enable the EOQ for components to be provided at MUCH lower cost per part than the same part if it was for a 5000 units per year car.

Remember the Viper? Sure, it had a V-10, but the cost of the engine along with the transmission, might have been the least impacted components affected by the low number of vipers sold because the tranny was off the shelf and most of the engine was also sold in Ram trucks at the time. EVERY THING else in that car had VERY low EOQ levels and resulted in a vehicle VERY similar to Corvettes at the time, being priced 25-30+% higher than vettes.

The only component of the C8 that HAD to be pretty unique is the Trans axle. By making the DCT the only transmission, it increased the EOQ by about 15% (the # of C7 manual transmission units). The transaxle became just like the windshield; the same on every unit to be produced; THE highest Economic Order Quantity. So the DCT definitely entered into the ability to price the C8 at $59,995.

Hyundai does not believe they will sell anywhere near 30,000 "RM19"s so their EOQ is model is probably closer to that of the Viper and we know what happened to the Viper.

To a certain extent, Pricing can become a self-fulfilling prophecy. Price it where profits is good, but not greedy in order to sell more units in order to drive down the material costs per unit. Obviously, there is risk in this. But 67 years of customer winning, powerful reputation helps reduce that risk and seems to be paying off for the C8 and GM.
While I get what you're saying, and do agree on many points, from a business perspective, I think it's even simpler.

Hyundai is what it is in the US, but the global market they deal with is more than just the states. In the 80's they were a joke, and even the '09 Tucson I got during Cash-For-Clunkers, trading in my '01 ZR2 Blazer, had some problems.

My best guess is the're meeting expectations on the rally/racing circuit (which is what the project would really be for) and want to spend more on the Genesis brand to build more business in the luxury segment.

A single car like the C8 better not be enough for a global car company to decide to cancel a project like this.
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Old 12-04-2019, 03:28 AM   #6
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Quote:
Originally Posted by stu View Post
A single car like the C8 better not be enough for a global car company to decide to cancel a project like this.
...and yet, that's pretty much what the Hyundai development Head said. Sooo...
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