Hyundai's Dilemma With The Winged Genesis Badge

[DRS]

Mark, I can see from this and the oil thread you enjoy wasting our patience on non-arguments. Your rather irrational position is based on your assertion about ownership among HK companies, which somehow shows the Genesis cars cannot be presented as a separate brand in the marketplace, which is false. Your additional points are that the Genesis is automatically perceived as a separate brand, which is false, and that Hyundai and/or Kia could not launch more than two separate brands, also false.

He can get where if he were in charge of the Apollo moon program, history would have shown a failed enterprise due to negative cynicism.

 

[Mark_888]

Mark, I can see from this and the oil thread you enjoy wasting our patience on non-arguments. Your rather irrational position is based on your assertion about ownership among HK companies, which somehow shows the Genesis cars cannot be presented as a separate brand in the marketplace, which is false. Your additional points are that the Genesis is automatically perceived as a separate brand, which is false, and that Hyundai and/or Kia could not launch more than two separate brands, also false.

1. I Never said that Genesis cannot be sold as a separate brand, either at Hyundai dealers or separate dealers. Certainly they can.
2. I never said that Genesis is perceived as a separate brand, just that it is sold that way in Korea, and that is why it has no H's in Korea (and why we can purchase wings to replace our H's from Korean parts importers).
3. Again, Hyundai can launch as many brands as they want to in the USA, but they don't want to, at least yet. That may change at some point.
4. This all comes down to people who want Hyundai and new dealers to spend billons of dollars to create a separate dealership network, raise the price of the cars to pay for it (which would hurt sales), which I personally don't think will work at this point. Maybe someday it will work, but so far I think Hyundai Motor America has made the right decisions on this.
5. I obviously have more trust than you do in Hyundai Motor America to make the correct marketing decisions. Lots of people want them to do things, but not everyone stops to carefully analyze what it will cost to do it.

 

[Mark_888]

He can get where if he were in charge of the Apollo moon program, history would have shown a failed enterprise due to negative cynicism.

The Apollo project was US government funded, and did not have to show a profit. I have no doubt that Hyundai can launch a separate brand, and maybe soon they will (at existing dealers or new dealers), but I have some trust in Hyundai Motor American to make the correct decision on that, especially since it is their money, not mine. Lots of people have great ideas on how to spend other people's money.

 

[PMCErnie]

Seems to me that most Ford and Lincoln dealers work out of the same building these days. The same thing is true for Toyota/Scion dealers. Sure, Lincoln sales have not been blooming in recent years, but that does not mean that the concept of having both brands under the same roof is not valid. Likewise, it would be simple enough for Hyundai dealers to place another sign out front, in addition to the Hyundai brand. The only question is what that sign would say. If Hyundai wants to have a luxury division, they will have to name it. In any case this would be a logical and economical step forward. It is also easy enough for these dealers to set up things like separate waiting rooms for the high-end customers so that they don't have to smell the armpits of the lowly Hyundai owners.

 

[RN2X]

It is also easy enough for these dealers to set up things like separate waiting rooms for the high-end customers so that they don't have to smell the armpits of the lowly Hyundai owners.

That is what the Equus customers said about the Genesis buyers.

 

[Top Gear]

^^ And the Sedan buyers about the Coupe buyers, indeed

Ernie and I are coming from a similar POV (although my Hyundai dealer is quite a nice place to visit). If Hyundai-Kia wants to make Genesis separate, they can, and the excuses people make are BS. That that do not make Genesis or Equus separate after all these years and after missing all the opportunities when they were getting all the attention in 2010-11-12, means the marketplace is continually confused as to what they are doing with Genesis and Equus. That's why every single person who asks me about my car asks me "who makes it?". They do not see Genesis as a separate brand, a recognizable brand at all, nor do they automatically associate it with Hyundai or Kia. This is bad marketing. Great cars, bad marketing.

We'll just have to wait and see what they do in future...

http://www.hyundaimotorgroup.com/About-Us/Philosophy.hub

 

[Mark_888]

When Hyundai first bought Kia in 1998, they acquired a 51% controlling share of Kia. However, Hyundai now only owns 33% of Kia. At one time the parent company was called Hyundai-Kia Motor Group, but is now called Hyundai Motor Group.

Hyundai and Kia run separate styling/marketing organizations that compete against one-another. If an Equus is sold, Hyundai Motor Group gets 100% of the profits. If a Kia K900 is sold, Hyundai Motor group only gets 33% of the profits.

Hyundai and Kia, partly because of the close history in the past, current relationship, and just their desire to reduce R&D and production costs, have extensive technology and manufacturing sharing relationships.

Even if Hyundai Motor Group sold its remaining 33% interest in Kia, I would expect them to continue most of their technology and manufacturing sharing relationships, since it saves them both money.

 

[Sal Collaziano]

I think Hyundai would make more money selling Genesis vehicles as a separate brand OR as a sub brand. The sub brand would be much less expensive. But - if they chose to go the separate brand route - I still feel they'd either make more money or break even for the time being. Yes, the vehicles would cost more - but people would be willing to pay more and more people would buy them because of it being a luxury brand with a luxury sales and service experience.

Not every Hyundai dealership would be involved. Only dealerships that sell the Equus would either host the sub brand or co-brand with "Genesis". And, as mentioned, this has been done before. Lincolns being sold out of Ford dealerships and Oldsmobiles being sold out of Cadillac dealerships. There are less GM brands now but there are still joint-dealerships in a lot of locations.

 

[FastDEW1]

I've said many times in this forum that Hyundai really needs to (and I believe will finally give in to doing so) create a new brand or sub brand. It's just how the world works.

Multi line mfgs have separate brands for a reason. People do not want their BMW / Mercedes / Lexus / Infinity, etc associated with a lower cost or lower prestige brand. Brands move up market or down market by separation of existing names. They do so because they have to in order to get the premium price in the premium brand. If they go down market they separate the brand yet again in order not to polute the existing premium brand. Hyundai will end up doing so or they will never get the price points to hold on the top line models.

In marketing the top line can pull the lower priced units up. But mostly it works the other way around and the lower priced (often perceived as lower quality or exclusivity) pull the top units down.

Toyota - Lexus (up market)
Nissan - infinity (up market)
Toyota - Scion (down market)
BMW - Mini (down market)
Ford - Lincoln (trying for up market)
Chevrolet - Cadillac (up market)

I could go on an on if I were to bring in non-automotive brands. But the point is Hyundai doesn't have a magic solution to market driving factors that the rest of the world isn't aware of.

 

[Mark_888]

I've said many times in this forum that Hyundai really needs to (and I believe will finally give in to doing so) create a new brand or sub brand. It's just how the world works.

Multi line mfgs have separate brands for a reason. People do not want their BMW / Mercedes / Lexus / Infinity, etc associated with a lower cost or lower prestige brand. Brands move up market or down market by separation of existing names. They do so because they have to in order to get the premium price in the premium brand. If they go down market they separate the brand yet again in order not to polute the existing premium brand. Hyundai will end up doing so or they will never get the price points to hold on the top line models.

In marketing the top line can pull the lower priced units up. But mostly it works the other way around and the lower priced (often perceived as lower quality or exclusivity) pull the top units down.

Toyota - Lexus (up market)
Nissan - infinity (up market)
Toyota - Scion (down market)
BMW - Mini (down market)
Ford - Lincoln (trying for up market)
Chevrolet - Cadillac (up market)

I could go on an on if I were to bring in non-automotive brands. But the point is Hyundai doesn't have a magic solution to market driving factors that the rest of the world isn't aware of.

Whether you are right or not is debatable. I personally don't know for sure.

But I think you are missing the reason why Hyundai Motor America wants to sell the Genesis and Equus as a Hyundai (at least so far). They are not trying to sell a lot of Genesis or Equus, they are using the Genesis and Equus to improve the Hyundai reputation to sell a lot of Sonata, Elantra, and Sante Fe. Right now, an alarming number of Accord and Camry buyers don't even test drive a Sonata.

______________________________

Help support this site so it can continue supporting you!

 

[FastDEW1]

Whether you are right or not is debatable. I personally don't know for sure.

But I think you are missing the reason why Hyundai Motor America wants to sell the Genesis and Equus as a Hyundai (at least so far). They are not trying to sell a lot of Genesis or Equus, they are using the Genesis and Equus to improve the Hyundai reputation to sell a lot of Sonata, Elantra, and Sante Fe. Right now, an alarming number of Accord and Camry buyers don't even test drive a Sonata.

I'm right. How do I know? Because that is marketing 101. The whole world knows it. Look around at brands and see how they are setup. It's not me being right. It's the world and how it works. I'm not a genius. I just know what I've been taught in school, MBA classes and how the world goes around in terms of consumer preferences and behaviors.

No - I didn't miss the point of why Hyundai has used them as helo cars so far. They do feel it will lift the brand. But in the end, they know that they will need to create a separate brand. Will it happen in 2 years? 4 years? 10 years? I do not know. But for sure it will happen. In the mean time I will keep getting good buys on these "halo" cars. I wouldn't buy one as my premier vehicle. I have others that fill that for me such as my MB and RR and others. But for solid daily drivers which I don't feel bad about putting lots of miles on it comfort. They are perfect. Just like when Lexus was new to the market.

The Equus my business partner has is far more reliable than my 550. And almost as nice too. For much less $$. But it lacks the brand so even he has a MB for his weekend car when going out to impress. Is that smart? No. But it's life...

 

[YEH]

What some may not realize is that the KDM wings were because the Genesis is not sold as a Hyundai brand in Korea. It was sort of like Ford and Lincoln. A Lincoln is made by Ford Motor Company, but it has a separate brand.

A more apropos example for here would be the Mustang and Corvette would have their own badges and not the Ford blue oval or the Chevy bow-tie.

In Korea, the Genesis and Equus are their own sub-brands (as is the KDM version of the Buick LaCrosse which is sold as an Alpheon).

Same thing for Japan where the luxury Toyota Century and Crown Majesta and the departed Nissan President had their own special badging.

Aren't you totally missing the point? Who cares about all that? If they wanted to follow the Kia model it is very easy to create, or even appear to create, a separate entity and dealer network. It also begs the question of why Genesis and/or Equus weren't done under Kia instead of Hyundai, and that consideration itself means Genesis deserves to be separate.

Why would the Genesis and Equus be done under Kia - when Kia has their equivalents - the K900 and soon to come (presumably) K800?

And also, it takes a massive amount of capital to launch a new brand, much less a new dealer network - and simply wasn't worth doing it based on the volume of Genesis sedan and coupe sales (with the later addition of the Equus).

Hyundai is still undergoing the process of revamping its own dealer network - which takes priority over spending $$ on trying to build a new separate one.

In addition, the $$ would be better spent on expanding its luxury models/offering than subsidizing the build-out of shiny, new dealerships.

Hyundai-Kia (or whatever their corporate brand is this year) are really bad at brand marketing. How many more years are we going to have to explain what a Genesis is?

Yeah, they are so bad at it - that the Genesis sedan is the no. 3 best selling midsize RWD luxury sedan in the US and no. 2 in Canada (even outselling the 5 Series).

Gee, why can't Infiniti and Lexus do a better job of marketing the Q70 and GS?

Or for that matter, Acura with their entire lineup of sedans?

If Hyundai-Kia wants to make Genesis separate, they can, and the excuses people make are BS. That that do not make Genesis or Equus separate after all these years and after missing all the opportunities when they were getting all the attention in 2010-11-12, means the marketplace is continually confused as to what they are doing with Genesis and Equus.

Sure they can do it - it simply does not make good business sense to do it right now.

Now, when they are ready to add a CUV, along with the new coupe and compact RWD sedan - then it would be a diff. proposition.

And again, how is the marketplace confused when the Genesis sedan outsells the GS and M/Q70 both of which having had a head start?

What did having a separate brand do for the Q45?

Infiniti was in such bad shape/bleeding so much $$ that Ghosn seriously thought of doing away w/ the brand.

Along the same lines, Akio Toyoda had to be talked out of killing the GS.

I think Hyundai would make more money selling Genesis vehicles as a separate brand OR as a sub brand. The sub brand would be much less expensive. But - if they chose to go the separate brand route - I still feel they'd either make more money or break even for the time being. Yes, the vehicles would cost more - but people would be willing to pay more and more people would buy them because of it being a luxury brand with a luxury sales and service experience.

Doubtful.

Going the full separate brand would have added $7-8k to price of the Genesis which would bring it to price parity w/ the GS and Q70.

Sales of the Q70 are abysmal and the GS isn't doing that great despite the supposed brand-strength of Lexus.

Acura is on track to sell a whopping 2,400 of the RLX for the YEAR! (Which is like a good sales month for the Genesis.)

Not every Hyundai dealership would be involved. Only dealerships that sell the Equus would either host the sub brand or co-brand with "Genesis". And, as mentioned, this has been done before. Lincolns being sold out of Ford dealerships and Oldsmobiles being sold out of Cadillac dealerships. There are less GM brands now but there are still joint-dealerships in a lot of locations.

While I agree that moving to a sub-brand is the way to go and having a certain requirement when it comes to the new sub-brand, only about maybe half of Hyundai dealerships would meet that requirement - which would mean fewer dealerships selling the Genesis and hence, fewer Genesis sales.

Hyundai needs all the Genesis sales it can get at the present - and such a move would only make sense when Hyundai has a fuller lineup of luxury models to offer.

Multi line mfgs have separate brands for a reason. People do not want their BMW / Mercedes / Lexus / Infinity, etc associated with a lower cost or lower prestige brand. Brands move up market or down market by separation of existing names. They do so because they have to in order to get the premium price in the premium brand. If they go down market they separate the brand yet again in order not to polute the existing premium brand. Hyundai will end up doing so or they will never get the price points to hold on the top line models.

While that is true, it certainly is no guarantee of success/greater success.

See all the above examples.

Hyundai has been able to attain the level of sales success w/ the 1G Genesis and now the 2G primarily due to the pricing advantage it has over its competitors (primarily the Japanese).

Going the full, separate lux brand route and the Genesis would lose much, if not all of that pricing advantage and the Genesis sales would probably be more like that for the Q70.

 

[PMCErnie]

If Mr. Toyoda is so smart, why is his company spelled Toyota?

Signed Ernie, who wishes he owned a "premier" vehicle.

 

[Sal Collaziano]

A couple of things... If Hyundai made Genesis it's own brand - and the cars cost $7-8k more for the consumer, I'm pretty confident Hyundai would be able to bring the quality of the vehicles up just enough to be on par with competition...

Otherwise... I think Mark has an important point here:

Right now, an alarming number of Accord and Camry buyers don't even test drive a Sonata.

That's a major problem I hadn't really considered... I find it RIDICULOUS that Accord and Camry owners don't test drive a Sonata first. Well - maybe it's because I like the 2015 Sonata SO MUCH... To me, this is the first model year I'd be happy owning a Sonata. My father has been buying them for YEARS but they never truly appealed to me until now.

Anyway. That being said... I imagine Hyundai wants to keep the Genesis and Equus in it's "flying H" lineup until brand perception is good enough that cars like the Sonata and Elantra sell better. Because if "Genesis" became a separate brand and cars like the Sonata and Elantra LOST sales because the Genesis and Equus were no longer there - that would be a disaster...

So I'll be patient.

 

[Top Gear]

QFT.

...Multi line mfgs have separate brands for a reason. People do not want their BMW / Mercedes / Lexus / Infinity, etc associated with a lower cost or lower prestige brand. Brands move up market or down market by separation of existing names. They do so because they have to in order to get the premium price in the premium brand. If they go down market they separate the brand yet again in order not to polute the existing premium brand. Hyundai will end up doing so or they will never get the price points to hold on the top line models...I could go on an on if I were to bring in non-automotive brands. But the point is Hyundai doesn't have a magic solution to market driving factors that the rest of the world isn't aware of.

I'm right. How do I know? Because that is marketing 101. The whole world knows it. Look around at brands and see how they are setup. It's not me being right. It's the world and how it works. I'm not a genius. I just know what I've been taught in school, MBA classes and how the world goes around in terms of consumer preferences and behaviors...

This is where I'm coming from, as well. I'm hearing a lot of theory and speculation about what some merely think Hyundai-Kia are doing or might do, but it's really just that. It's entirely possible we'll still be speculating on this for many years to come. Genesis sales may be doing well based on projections, but in the great sea of public awareness and with so many other brands and perceptions, I'm still seeing that after nearly a decade, very few people know what Genesis is or who makes it. I often can't tell the difference at a glance between the Sedan/Equus and other cars it was designed to look like, and regarding the Coupe, I hear the same thing almost every day: "Nice car! Who makes it??"

Also, I can't help but note the lowered expectations on their faces when I say who. That's unfortunate because the Hyundai brand name is just tainted for too many people, like Yugo, Saturn, Daewoo, or others, including Kia. As I've said, I'm getting tired of having to be a brand ambassador for these cars. How many people really have to constantly explain what a Lexus, Scion, Infinity, or Acura is?? Was there any comparable confusion in the first 5-10 years about those brands? If so, why is Genesis different, and if not, why is Genesis different? For that matter, who has to explain Toyota, Nissan, or Honda?? Don't get me wrong, I'm proud of these cars and what HK has done, but I'd also like to see more separate branding and some actual marketing that establishes the Genesis and Equus as such. Brand perceptions matter, but aren't exactly rational or fair.

I'd also like more definite confirmation of where HK is definitely going in future with these brands. Car blogs, magazines, and discussion forums often sound like dog-wagging based on no real "tails" of evidence

 

[Sal Collaziano]

It sounds to me like this whole "winged badge' dilemma truly IS holding back Hyundai marketing. I mean - Hyundai builds these great cars and nobody associates them with Hyundai. What if the CTS-V was never associated with Cadillac? Or the Escalade? Where would they be now? Probably in the same place Oldsmobile, Pontiac and Saturn are.

Unfortunately, the badge is a very important piece of the car buying and owning puzzle. Perhaps Hyundai should be doing more marketing where they're calling the Genesis, "HYUNDAI Genesis". At least for the time being.

Or how about "Genesis - by Hyundai". That's what Buick did with the Riviera...

Yes, it's a shame and I get the same reaction when I tell people the car they're ogling over is a Hyundai. I expect them to raise their eyebrows and say, "Really?" with encouragement. Instead the opposite happens and they lose all respect for the car. It's very unfortunate...

 

[Top Gear]

Yep, that's what I'm sayin' The wings should have been a normal part of the cars (Coupe and Sedan) from the start, with no "H"s anywhere, and no "Hyundai Genesis" - just "Genesis", or perhaps with a "By Hyundai" in fine print. That alone would have made such big a difference. Advertising and brochures, too, should have all been separate. It would have been soooo simple (as a start in 2008), and wouldn't have cost anything different, really. Yet, after all these years we're still having to explain to people at gas pumps what these cars are, when that was Hyundai's job! They should give us a discount for doing their local marketing for them

 

[Mark_888]

Even if it was a separate brand, as soon as people find out it is made by Hyundai, I don't think the reaction is going to be any better than if it is called a Hyundai Genesis.

Everyone knows that Lexus is owned by Toyota, but Toyota had a very good reputation for reliability when the Lexus brand was started. Same with Honda/Acura.

 

[Mark_888]

...HK is ...

That's right, just keep saying Hyundai-Kia a thousand times until you believe it to be true, even though it is not true and they are now separate companies. In 1998 Hyundai owned 51% of Kia, and it was called Hyundai-Kia Motor Group back then, but now that they only own 33% of Kia, it is called Hyundai Motor Group.

 

[Mark_888]

Acura is on track to sell a whopping 2,400 of the RLX for the YEAR!

Since the RLX is made in Japan, and the yen has crashed against the USD, I wonder if they are heavily discounting the them. I think all the other Acura's are assembled in the USA.