Don’t laugh at Hyundai for creating its own luxury brand.
It’s well past 30 years since the South Korean upstart debuted in Canada – longer than it took Japanese auto makers, such as Honda and Toyota, to launch Acura (in 1986) and Lexus (1989) respectively.
Meanwhile, Hyundai has had success with the Genesis name: when the badge first appeared on a large Hyundai sedan in 2009, it promptly won both the North American and Canadian Car of the Year awards. In the United States, the Genesis sedan claims the highest owner loyalty in its segment.
So let’s not accuse Hyundai of trying to run before it can walk. “We’ve paid our dues and the time is right,” says David Zuchowski, president and CEO of Hyundai Motors America.
More surprising is the type of luxury vehicle Genesis is launching first – a prestige sedan – and how the car will be sold in Canada: online and delivered to your home.
In today’s high-five-figures luxury market where the Genesis G90 will compete, most marques sell substantially more SUVs than traditional sedans.
Still, in the automotive pecking order, large prestige sedans (read: Mercedes S-Class, BMW 7 Series, Lexus LS460) are the ultimate showcases of a brand’s image and capability. In Hyundai’s case, launching with sedans is also a matter of product-cycle timing: Hyundai doesn’t have a large-SUV architecture in its lineup but it does have a large sedan – the Equus – being phased out.
A second Genesis debutant making its debut this fall, the G80, is basically a re-badge of the Gen-2 Hyundai Genesis sedan that was new in 2015. Genesis plans to add four more models over the next five years: a G70 compact sedan and coupe, plus yet-to-be-named compact and mid-size CUVs. By that time, the brand should be moving enough volume to justify dealers making the investment in stand-alone facilities.
Meanwhile, the most contentious aspect of the venture is that it will launch without a dedicated dealer network. Canadian prospects won’t even be able to find Genesis cars in Hyundai dealerships, in contrast to the United States where Hyundai dealers will carry the inventory and make the sale.
Instead, in Canada, “we will focus solely on Genesis at Home, which is concierge sales,” says Michael Ricciuto, director of the Genesis brand and corporate strategy. “We bring the car to you. We’ll have Genesis at Home online purchase and Genesis at Home service.”
Genesis Motors Canada will own the inventory and the dealers will conduct transactions on the original equipment manufacturer’s (OEM) behalf. They will bring a vehicle to the customer, who will purchase through Genesis Motors Canada. Dealers will be compensated on each sale. Initially, about a dozen Hyundai dealers will participate; ultimately, by the time a network of Genesis stores is established, Ricciuto is aiming for 33.
Meanwhile, Genesis at Home will be complemented by boutique sales locations in select malls and downtown locations
“It’s like a hybrid between leveraging our current dealer body and having a program where the OEM sells direct,” Ricciuto says.
Industry analyst Chris Travell, of Bond Brand Loyalty, notes the growth and profitability of the luxury market, but cautions: “The challenge for Hyundai is that they will be attracting customers to the brand who have never been there before. They come armed with expectations from other luxury makes and if the brand doesn’t deliver, Genesis will quickly be dropped from the consideration list.
“The concierge sales strategy is an interesting development,” Travell adds. “Customers don’t want their time wasted and, if Genesis can get this right, it could help attract customers to the brand. There will be challenges getting this to work at the dealership level since dealers will certainly want to be compensated for their efforts but it has the potential for making the brand stand out.”
A key second element of this experiment will be fixed, no-haggle, all-inclusive pricing: “One transparent price [that] eliminates all the extra charges and fees found at the dealer level, including destination and delivery charges and admin fees,” Ricciuto says. “We’re taking the whole negotiation out of the equation and allowing the dealer to focus on selling the brand and the car.”
Bringing the dealership to the customer also meshes nicely with how Genesis plans to mark its territory as a newcomer to the luxury landscape. Using buzz-phrases such as“enlightened and human-centric” and “showing respect,” Genesis stresses the buying and ownership experience – and in particular, respect for customers’ time. “Time is the ultimate luxury,” says Ricciuto’s U.S. counterpart, Erwin Raphael.
Customers will save time in comparing tech specs for the car. While many rivals offer numerous models, each trailing a laundry list of options – some mutually exclusive and others required in combination – the G90 choices couldn’t be simpler: two models, 3.3-litre twin-turbo V-6 or 5.0-litre V-8 engine, each with all-wheel drive and standard just-about-everything.
The V-8 does add a few features over the V-6 (notably, heated-or-cooled reclining back seats) but there are no options. In particular, Genesis brags about the 11 advanced active-safety features that are standard; the most included on any rival (the S-Class) is three.
In size and roominess, the G90 is a closer fit with the competition’s long-wheelbase versions (if they even offer one). Rear-seat legroom is vast, comfort supreme. Up front, a 22-way-adjustable driver’s seat is standard. A 12.3-inch screen is interfaced via a rotary-knob controller, though most legacy functions can also be regulated by conventional knobs and buttons.
A 450-kilometre cruise from downtown Vancouver to the Okanagan valley in V-6 models revealed that dynamically the G90 has nailed the basics. A class-appropriate blend of rush with hush, comfort with control, delivered limo-like serenity over the Coquihalla highway yet smaller-car agility in the hills above the lake. A couple of reservations will bear further investigation: turbo launch lag (which may have been aggravated by altitude power loss); and occasional, surprising rear-suspension skitter over bridge expansion joints.
Prices will be revealed closer to the fall sales debut. Expect the G90 to ask significantly more than the outgoing Equus’s $64,000 but substantially less than the six-figure starting prices of less-loaded name-brand competitors.
Surprisingly, Hyundai/Genesis officials say they and are not targeting any particular niche of buyer demographics, nor relying on former Hyundai-Genesis owners. They expect Genesis-the-brand to have broad appeal. More realistically, though, the G90 (and G80) should attract the same buyer that Hyundai cited when it launched the Equus in Canada: “Savvy, modern, expressive consumers with post-recession values who earn social status more by outsmarting the Joneses than by out-spending them.”
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