Hyundai's US design chief Chris Chapman with the HCD-16 Vision G Coupe concept.
When the new Genesis luxury brand debuts next year, parent Hyundai Motor Co. will introduce it in a careful series of steps, the details of some yet to be worked out, according to insiders and well-informed industry observers.
Only two product lines will be ready at first, both based on Hyundai’s existing, high-end products. And while they will get new names and badges, they will continue to be sold within the confines of existing dealerships, rather than from fancy new showrooms, a move that could significantly reduce Hyundai’s initial cash outlay.
But in the years that follow, Genesis will begin to receive an assortment of new products, and will see a focus on new sales and service techniques designed to differentiate the new luxury brand from more established competitors from the U.S., Europe and Japan, sources agree.
“If you look at the dealers experience from 30 years ago and compare it to today, it’s not all that different,” stressed a senior Hyundai insider. “We’ve got to make some changes.”
(Hyundai delivers a surprise as it announces plans for Genesis brand. Click Here for the initial story.)
At start up, Hyundai announced this week, there will be two Genesis products. That includes an update of the current midsize Genesis sedan – which will be renamed the G80, rather than having the odd nomenclature of Genesis Genesis. The full-size Hyundai Equus, meant to compete against the likes of the BMW 7-Series, will be renamed the G90, and all future products will get alphanumeric designations.
Hyundai redesigned its midsize luxury sedan, the Genesis for 2015. It will become the Genesis G80.
There will be at least six products by 2020, and that list will include two utility vehicles and a performance-oriented luxury coupe that will borrow heavily from the well-reviewed Vision G concept vehicle Hyundai first showed at the Pebble Beach Concours d’Elegance in August. It wasargely designed under the help of Chris Chapman, a former BMW stylist now overseeing Hyundai’s advanced design study in California.
The Vision G picks up on some of the basic elements of the Fluidic Sculpture design language developed for the Korean maker’s mainstream products, but it “carries a lot of DNA of our future direction,” in the luxury segment, Peter Schreyer, himself a one-time Audi styling chief and now a Hyundai Motor Co. president, told TheDetroitBureau.com in August – without disclosing plans for the Genesis brand.
(Mercedes-Benz launches the S-Class of SUVs. Click Here for a look at the new GLS.)
In fact, even many senior officials in the U.S. and Korea apparently were kept in the dark about the Genesis brand plans which came as a near-complete surprise. Hyundai had considered launching a fully separate brand a decade ago, as it was preparing to launch the first Genesis sedan.
But the timing proved bad, the new luxury model coming to market in 2008, just as the global automotive market entered a deep recession,” said Stephanie Brinley, a senior analyst with IHS Automotive. Instead, Hyundai decided to stick with just two products and offer both Genesis and Equus under its mainstream badge through existing Hyundai dealerships.
Going forward, the G80 will continue to be offered at all of those stores. The Equus has been offered on a more limited basis and Hyundai is apparently working out final details on its future distribution. It is not yet clear if the broader Genesis brand will be limited to select dealers or available to all Hyundai outlets, according to several sources.
Either way, they agreed that dealers will be required to take a number of steps focusing on delivering a more customer-friendly experience.
“We’ve got some to do on what that differentiation will be,” said one insider, noting the company is studying a number of options – including some now used for the top-line Equus. These include a valet service approach, as well as the “Your Place, Your Time” sales policy. Instead of forcing potential customers to go to a Hyundai dealership, a sales rep will take an Equus to wherever a buyer wants, such as a home or office.
A key goal, the source continued, will be to create, “a hassle-free experience.”
The Genesis roll-out, starting with just two products, resembles the slow pace of the Lexus debut 26 years ago. But where the Toyota luxury brand required dealers to set up standalone showrooms, the Genesis distribution model will – at least initially – more closely follow the approach Toyota took with its youth-oriented Scion sub-brand. Genesis products will get a clearly delineated section within existing Hyundai showrooms, and will likely have dedicated sales stuff, said analyst Brinley.
“It’s very logical how they’re doing this,” she said, noting that going in with guns blazing could add billions of dollars to the cost of the Genesis launch.
She believes Hyundai dealers will be happy to put in the extra effort to get the additional product. While sales of existing Hyundai products have grown substantially in recent years, there’s tremendous competition and relatively modest profit margins in the mainstream segments. Luxury vehicles, while lower in volume, are seeing significant growth – and deliver much higher margins, some of which can be diverted to pay for the luxury touches high-line buyers are seeking, Brinley and other observers suggest.
(Lexus looks to maintain leadership in midsize crossovers with remake of RX line. Click Here for a look.)