Hyundai dealers try to sue Genesis from opening stand-alone facilities.... again

[TinsleyC]

If you understood the history you wouldn’t say that. The DID lay down the rules from the beginning and were beaten by the all powerful dealers lobby. What would you have them do?

Does anyone believe that Walmart should not be allow to buy its products at a lower price because that is unfair to other merchandisers?

This lawsuit is pure stupidity. Dealers are playing the short game. Take the money and run.

Okay. Maybe Hyundai did the right thing in the beginning, I have no idea. What I envision that Hyundai would have done is to protect themselves from any future lawsuits regarding these matters. Like, make it clear that the Hyundai dealers could sell Genesis branded cars, but that Hyundai plans to have standalone Genesis dealerships in the future and will do all they can to help accomplish that. Based on what you're saying, that's basically what they did, but got sued anyway. I agree that it's all stupid, no argument there.

 

[EdP]

Okay. Maybe Hyundai did the right thing in the beginning, I have no idea. What I envision that Hyundai would have done is to protect themselves from any future lawsuits regarding these matters. Like, make it clear that the Hyundai dealers could sell Genesis branded cars, but that Hyundai plans to have standalone Genesis dealerships in the future and will do all they can to help accomplish that. Based on what you're saying, that's basically what they did, but got sued anyway. I agree that it's all stupid, no argument there.

There in lies one of the problems. Seems like about 2004 or 2005 when the Genesis model was conceived there was no thought of a separate brand. It was later introduced as just another Hyundai.

Then one day, "hey, I have an idea, lets start a new brand"

Without corporate paperwork, it is just pure speculation.

 

[TinsleyC]

Good point, taking the Genesis away from Hyundai to become the Genesis G80 - Hyundai's top end car - that's what did it. If Genesis could have started out with different cars altogether, things may have gone differently.

A quick search shows the first Lexus was the LS 400, first Infiniti was the Q45, and first Acuras were the Legend and Integra - none of which appear to have come from the parent company.

 

[Backslack]

There in lies one of the problems. Seems like about 2004 or 2005 when the Genesis model was conceived there was no thought of a separate brand. It was later introduced as just another Hyundai.

Then one day, "hey, I have an idea, lets start a new brand"

Without corporate paperwork, it is just pure speculation.

It is not speculation. I already pasted a link to an article that summarized most of the news sources that reported the situation on the first page. And if you look on the site in the OP, it even includes a PDF of the lawsuit that neatly summarizes the issue that the dealers had with Hyundai and Genesis.

The issue arose with the Genesis G80 and G90 being initially sold at Hyundai dealerships, and has nothing to do with the licensing on the Hyundai Genesis.

 

[Backslack]

Here are some relevant snippets from the PDF, though keep in mind this is from the perspective of the dealership:






The Genesis Participation Agreement was what granted Hyundai dealerships the right to sell the G80 and G90, and around 350 dealers voluntarily signed up for it. So the issue was never with the Hyundai Genesis nameplate, but the ability for Hyundai dealerships to have the license to sell Genesis vehicles distributed by Hyundai Motor America. Genesis vehicles after 2017 were distributed by Genesis Motor America instead of Hyundai Motor America, which was not part of the Genesis Participation Agreement. The GPA was a temporary license for Hyundai dealers to sell Genesis models, and they threw a fit once that was replaced, because then they would no longer be eligible to receive Genesis models unless they were chosen as one of the standalone dealer sites by Genesis Motor America.

Before anyone claims that this is just limited to Florida, other states had similar dealer lawsuits against Hyundai for the exact same "violation of the Genesis Participation Agreement". Here's one from a quick Google search that took place in Louisiana:

Eddie Tourelle's Northpark Hyundai, LLC v. Hyundai Motor Am. Corp., CIVIL ACTION NO: 18-11757 SECTION: "H"(1) | Casetext Search + Citator

 

[Backslack]

And as much as I don't want to triple post, here's the PDF file of the new Florida dealership lawsuit (with the allegations about the incentives) in case anyone wants to comb through the details.

 

[YEH]

Not that simple from everything I've read. It was the difference in how the corporation and brands were structured from the start.

Due to certain state franchise laws, Lincoln has had the same issue despite having been a separate franchise from the start.

Okay. Maybe Hyundai did the right thing in the beginning, I have no idea. What I envision that Hyundai would have done is to protect themselves from any future lawsuits regarding these matters. Like, make it clear that the Hyundai dealers could sell Genesis branded cars, but that Hyundai plans to have standalone Genesis dealerships in the future and will do all they can to help accomplish that. Based on what you're saying, that's basically what they did, but got sued anyway. I agree that it's all stupid, no argument there.

Good point, taking the Genesis away from Hyundai to become the Genesis G80 - Hyundai's top end car - that's what did it. If Genesis could have started out with different cars altogether, things may have gone differently.

A quick search shows the first Lexus was the LS 400, first Infiniti was the Q45, and first Acuras were the Legend and Integra - none of which appear to have come from the parent company.

While that is part of the issue, it's not the only one according to certain state franchise laws.

Despite being a separate franchise, Lincoln dealerships that shared premises with a Ford dealership (in certain states) sued FoMoCo when Lincoln initiated an incentive program which favored Lincoln franchises which were separate stores.

 

[Mcc]

Despite being a separate franchise, Lincoln dealerships that shared premises with a Ford dealership (in certain states) sued FoMoCo when Lincoln initiated an incentive program which favored Lincoln franchises which were separate stores.

Was the suit settled and if so what was the outcome?

 

[Backslack]

Was the suit settled and if so what was the outcome?

The suit he's talking about was filed earlier this year, so it might be too soon to reach a settlement.

N.J. dealer association sues Ford, Lincoln over standalone store program

 

[Aquineas]

The #1 complaint of all Genesis owners was and continues to be the dealers. If Hyundai dealers consistently offered the level of service and support to Genesis owners that's expected of a luxury brand, there would be no need for separate facilities.

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Help support this site so it can continue supporting you!

 

[Mcc]

The #1 complaint of all Genesis owners was and continues to be the dealers. If Hyundai dealers consistently offered the level of service and support to Genesis owners that's expected of a luxury brand, there would be no need for separate facilities.

Yes but why should they? They don't seem to have to offer luxury support to their Hyundai customers and clearly can not seem to distinguish between those customers and Genesis customers. With separate facilities the difference would be obvious. You argument is great in theory but will never work in practice.

 

[TurtleBoy]

And as much as I don't want to triple post, here's the PDF file of the new Florida dealership lawsuit (with the allegations about the incentives) in case anyone wants to comb through the details.

I must have too much time on my hands as I actually read the document. HMA and GMA better hope for some type of settlement because if it goes to jury they are going to lose on most every and perhaps all counts. Florida is a very dealer friendly state in large part due to their statues.

Hopefully they will be able to come to some type of agreement that can be a model for all states. I have a feeling in the end there will be stand alone facilities but it will be HMA and GMA funding them. Obviously that will take a huge amount of capital but may be the only way to get it done and they can hopefully recoup that with future sales.

 

[Backslack]

I have a feeling in the end there will be stand alone facilities but it will be HMA and GMA funding them. Obviously that will take a huge amount of capital but may be the only way to get it done and they can hopefully recoup that with future sales.

The dilemma with that is that Genesis wants to cull their existing dealer network, and even if they agreed to pay in full for all the separate facilities, they would have to offer that same agreement to every existing Genesis franchisee. There's nothing to stop all 350 or so current Genesis retailers from wanting to build the separate facilities and demanding GMA pay for it, because GMA would legally not be able to exclude them. The incentive program was designed to cull their retailers while financially encouraging the ones to build separate facilities, but if it's found to be unlawful, then we're back to square one.

It's an unenviable position for the brand overall. If the GV80 sells well, they may have more of a bargaining chip against their dealers, but that's not a guarantee for anything.

 

[TurtleBoy]

The dilemma with that is that Genesis wants to cull their existing dealer network, and even if they agreed to pay in full for all the separate facilities, they would have to offer that same agreement to every existing Genesis franchisee. There's nothing to stop all 350 or so current Genesis retailers from wanting to build the separate facilities and demanding GMA pay for it, because GMA would legally not be able to exclude them. The incentive program was designed to cull their retailers while financially encouraging the ones to build separate facilities, but if it's found to be unlawful, then we're back to square one.

It's an unenviable position for the brand overall. If the GV80 sells well, they may have more of a bargaining chip against their dealers, but that's not a guarantee for anything.

We always have talked about reducing the number of dealers but that was mainly a route to getting rid of the poor performing ones. I would think in the end GMA is more concerned with the quality of the dealers rather than the quantity.

That said, they would have to do something similar to what they did when the reduced the number of dealers the first time. They offered either a franchise or a buyout to all Hyundai dealers. If I remember correctly about 50% of the dealers choose the buyout rather than the new franchise. They could do something similar and many of the low volume dealers may choose the large payout rather than a facility that would not really produce similar revenue for many years to come.

 

[spirit73]

welcome to Hyundai all my so call Genesis people none of us will live longer enough to see a genesis stand alone dealer

 

[Prospective G80 Owner]

welcome to Hyundai all my so call Genesis people none of us will live longer enough to see a genesis stand alone dealer

And that's why some of us are no longer "Genesis people."

I have the unfortunate pleasure of having had first-hand experience with Braman Hyundai as it was my "home" Genesis dealer. In fact, my experience with Braman Hyundai was one of the main factors in my deciding to get rid of my 2019 G80 3.3T Sport last month and going back to a real luxury dealership network. Coincidentally, I sold my car to Braman before purchasing a Maserati. Interestingly, although the sales manager told me he purchased the car from me due to its unusual color (Polar Ice), Braman currently has it advertised incorrectly as Adriatic Blue. That gives you an idea of how knowledgeable Braman Hyundai is about the Genesis brand.

 

[LandOfConfusion]

And that's why some of us are no longer "Genesis people."

I have the unfortunate pleasure of having had first-hand experience with Braman Hyundai as it was my "home" Genesis dealer. In fact, my experience with Braman Hyundai was one of the main factors in my deciding to get rid of my 2019 G80 3.3T Sport last month and going back to a real luxury dealership network. Coincidentally, I sold my car to Braman before purchasing a Maserati. Interestingly, although the sales manager told me he purchased the car from me due to its unusual color (Polar Ice), Braman currently has it advertised incorrectly as Adriatic Blue. That gives you an idea of how knowledgeable Braman Hyundai is about the Genesis brand.

Look familiar? Do you think Braman is being careless or deliberately misleading? I’m tempted to contact them and ask if the have anything in Adriatic Blue.

 

[EdP]

Look familiar? Do you think Braman is being careless or deliberately misleading? I’m tempted to contact them and ask if the have anything in Adriatic Blue.
View attachment 31520

I can see some clerk in the office looking at it as blue so it must be Adriatic blue.
I cannot think of a single reason they would be intentionally misleading. What would they possibly gain?

 

[LandOfConfusion]

I can see some clerk in the office looking at it as blue so it must be Adriatic blue.
I cannot think of a single reason they would be intentionally misleading. What would they possibly gain?

I can only speculate, but if a dealership knows that a particular color is more popular, i.e., generates more search hits online, it would be a way to attract attention. I know there are some dealerships -- I don't know about Hyundai dealers -- whose software populates the fields on a used vehicle listing based upon the VIN. That would reduce the likelihood of clerical error.

 

[EdP]

I can only speculate, but if a dealership knows that a particular color is more popular, i.e., generates more search hits online, it would be a way to attract attention. I know there are some dealerships -- I don't know about Hyundai dealers -- whose software populates the fields on a used vehicle listing based upon the VIN. That would reduce the likelihood of clerical error.

Anything is possible but in the end, you piss off the guy wanting Adriatic blue and lose the guy looking for Polar Ice.