New Korean Car Comes to Town : Dealer Hopes Low-Priced Hyundai Will Draw Buyers
For Jesus Santamaria, a 31-year-old hospital technician, the new Korean-made Hyundai cars that arrived last week at Galpin Motors in Sepulveda offered an escape from a 1980 Ford Fiesta he no longer enjoys.
The Hyundai “seems real comfortable and it’s solid,†Santamaria said, adding that he wanted to get a new car without spending much money. “I want to know where my car’s been,†he said.
For Steven Stolar, a Sepulveda mail clerk who handed over a $100 deposit for a Hyundai (rhymes with Sunday ) before he even drove one, the first delivery of the autos at Galpin Motors was an unpleasant surprise. He was vexed to find out that a Hyundai carrying all of the options he wanted would cost $10,300, including tax and license, more than double the base sticker price.
“At that price, I’m out the door in a Toyota Corolla sedan,†an exasperated Stolar said. “And I think maybe I’d rather have a Toyota than a car I’d never heard of before a couple of weeks ago.â€
$4,995 Base Price
Executives at Galpin, the only dealer of the widely lauded Hyundai in the San Fernando Valley, are counting on reactions like Santamaria’s to be more common than Stolar’s, and early indications are favorable.
Galpin executives say the base price of $4,995 for Hyundai’s Excel, a subcompact that is the South Korean auto maker’s first model in the United States, should please consumers as much as a return to nickel candy bars or 10-cent Cokes would.
At that price, the Hyundai is $742 less than the average price of competing Japanese models. The five-door hatchback has front-wheel drive and a 1.5-liter, four-cylinder engine.
“These prices remind me of back when I was a kid,†said Herbert (Bert) Boeckmann, owner of Galpin Motors. The huge auto dealership recently began selling Suzuki and Hyundai cars in addition to its larger volume of Fords.
Targeting Lower End of Market
Many Galpin customers appeared enthusiastic. By last Thursday, before a single customer had seen a Hyundai, the dealer had 57 deposits for its initial shipment of 36 cars. By Monday morning, 28 cars had been sold, and the dealer had taken deposits for a shipment of another 64 expected this week.
Minutes after the first Hyundais were unloaded onto the Galpin lot on Thursday, crowds surrounded the cars, poking around the interiors and checking out the trunk space.
“It looks beautiful, like a very expensive car,†said Haront Chirinian, 36, of North Hollywood.
Auto industry analysts view the Hyundai as part of a push by auto makers to reclaim the lower end of the car market, now dominated by used cars selling for an average of $5,000. They say the Hyundai and cars like the Yugoslavian-made Yugo--a minicar that is scheduled to arrive at two Valley dealerships at the end of this month--are the start of a wave of cheaper foreign imports.
Introducing a new car in the United States isn’t easy, Hyundai officials say. Working to its advantage is Hyundai’s position as the best-selling import in Canada after being available there for only two years.
Hyundai officials say they have been careful in choosing which dealers will sell the cars. Boeckmann, for example, has been in the auto business 34 years and is a well-known multimillionaire philanthropist and political contributor.
“We’ve been leaning toward pillar-of-the-community types,†said Joshua Ryan, a spokesman for Garden Grove-based Hyundai Motor America. “The cars are new and people don’t know them, so we at least want them to know the dealers.â€
Galpin Motors is one of 12 Hyundai dealerships in Los Angeles County. Yugo has 13 dealers stretching from Ventura to San Diego, including Ogner Porsche-Audi in Woodland Hills and Crossroads Chevrolet in North Hollywood.
Arvid Jouppi, a Detroit auto industry analyst, says the Yugo--which has a base sticker price of $3,990, the lowest of any car sold in the United States--will have a harder time gaining acceptance than the Hyundai.
Yugoslav Work Ethic
“The workers in Yugoslavia clearly don’t have the kind of work ethic we associate with the Japanese,†Jouppi said. “But the Koreans have shown that they aim to follow the Japanese, and the American consumer appears ready to take them at their word.â€
Christopher Cedergren, a senior analyst for J. D. Power & Associates, a Westlake Village-based auto marketing consultant, said the Yugo has “the price advantage but the verdict is still out on whether they can match price with quality.â€
Cedergren cited a review in last month’s issue of Consumer Reports magazine that ranked the Yugo “below every other small car in recent years.â€
Yugo America maintains that its cars are more reliable than most cars sold in the United States. “In Yugoslavia, these cars are driven into the ground on the bumpiest, dustiest roads,†said Jonas Halperin, vice president for marketing at Yugo America, based in Upper Saddle River, N.J.
‘Excitement About Cars’
Chip Young, general manager for Crossroads Chevrolet, dismissed any concerns about Yugo’s popularity.
“There’s a lot of excitement about these cars,†he said. “One dealer I talked to in Dallas had his front window bashed in by people who wanted to see them.â€
Crossroads began accepting deposits on the Yugos last week. As of Monday, it had received five.
Ogner Porsche-Audi isn’t taking deposits on Yugos until it has a firm delivery date. But Robert Reilly, sales manager for the dealership, predicted that the Yugos will be popular among his customers as a second or third car.
“A guy who buys a Ferrari from us isn’t going to fall in love with a Yugo,†Reilly said.
For that matter, not every customer at Galpin has fallen in love with the Hyundai.
‘Piece of Junk’
“I wouldn’t touch the piece of junk,†said Murray Galperin, 67, of Van Nuys. Galperin said that, after looking at the Hyundai, he would replace his 1975 Chevy with a Nissan Sentra.
Teri Hackney, 26, a legal secretary from Van Nuys, said the Hyundai looked like a “pretty good deal.†She said she wanted to trade in her Chevrolet Camaro for something smaller and more maneuverable.
“I don’t think Nissan or Toyota have anything this nice for the money,†Hackney said.
But Eric Ellison, a lawyer and friend of Hackney’s, wasn’t impressed after opening and shutting the doors of the Hyundai a couple of times.
“It’s not a Mercedes,†he said.
