Report: Hyundai considering more luxury models, seperate luxury brand [w/poll]

[Sal Collaziano]

Filed under: Marketing/Advertising, Hyundai, Luxury



First the Genesis sedan, then the Equus. Clearly, Hyundai is pinning its ears back and charging upmarket like Ndamukong Suh rushing Aaron Rodgers. And, like the rookie Husker-bred defensive end, the Korean automaker is making a rather successful transition to the next level. What's next? Quite possibly a sedan designed to compete directly with the benchmark entry-level luxury sedan, the BMW 3 Series. After that, Hyundai may craft a crossover to go up against the segment-defining Lexus RX CUV.

According to a new report from The Wall Street Journal, Hyundai isn't nearly done refining the image of its top-level nameplates. Hyundai USA head John Krafcik told the WSJ in an interview that the automaker is actively considering whether it should break its premium models apart from the rest of its lineup, much in the same way Honda does with Acura, Toyota does with Lexus and Nissan does with Infiniti.

While this isn't exactly news, Krafcik's level of candor is. Three options are apparently on the table. First, an entire separate dealer network could be created to sell these Genesis-branded machines, but this would be very costly. Second (and reportedly most likely), a subset of the automaker's current set of dealers could add a section to their dealerships designed to cater specifically to upmarket clients - a showroom-within-a-showroom, if you like. They could even have their own dedicated employees. Lastly, Hyundai could stick with its current scheme of training at least one salesperson on the Genesis line, leaving the dealerships alone.

Whichever way Hyundai chooses to move, don't expect any hasty decisions. Krafcik says the company will keep a close eye on the success of its Equus sedan in the States before making any judgments on its dealer network. In the meantime, expect Hyundai to unveil a new global branding strategy at the 2011 Detroit Auto Show along with a slogan to replace the current "Drive Your Way" message.

One thing is clear: this decision will shape the way forward for Hyundai's continued performance in the United States. We're keenly interested in your take on the matter, and we know the automaker's execs are listening, too. What strategy should Hyundai adopt in its bid to move further upmarket? Make yourself heard in our informal poll below, as well as in Comments.


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Gallery: 2011 Hyundai Equus: First Drive



Photos copyright (C)2010 Damon Lavrinc / AOL

[Source: The Wall Street Journal, Automotive News - sub. req.]Report: Hyundai considering more luxury models, seperate luxury brand [w/poll] originally appeared on Autoblog on Wed, 08 Dec 2010 12:58:00 EST. Please see our terms for use of feeds.



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[incontrovertible]

Hyundai needs to set up a separate luxury identity. Either a completely separate dealership network or a "dealer within a dealer" can work. Leaving it unchanged in existing dealerships has not generated the buzz that these cars deserve.

 

[kogu]

Hyudai needs to address and iron out all issues with their Genesis Sedan, before setting this up.

 

[robthoke]

I don't think too many dealers would sign up for a separate dealership just for Genesis. I do think, however, the smart money would be to incorporate it within the existing dealership framework.

 

[RLREILLY81]

This has me wondering. If there was a break out line where would those of us who bought the cars prior to the split get our cars services? At the 'new dealership' or at the Hyundai dealer? I would get really pissed if we because a subset group where we bought the cars prior to the hype of a new line and now are consider stepchildren of the brand.

 

[Anathem]

This has me wondering. If there was a break out line where would those of us who bought the cars prior to the split get our cars services? At the 'new dealership' or at the Hyundai dealer? I would get really pissed if we because a subset group where we bought the cars prior to the hype of a new line and now are consider stepchildren of the brand.

I don't worry as much about a separate line since I would assume that any Genesis would be serviced there regardless of when it was purchased. My concern is with the second option. I live in a relatively small town with only one dealership. Would Hyundai create a "dealership within a dealership" everywhere or just at the larger dealers? One of my main reasons for buying a Genesis was to have the option for local service. I would hate to lose that or not have the amenities available to other owners.

 

[wallymn]

This has me wondering. If there was a break out line where would those of us who bought the cars prior to the split get our cars services? At the 'new dealership' or at the Hyundai dealer? I would get really pissed if we because a subset group where we bought the cars prior to the hype of a new line and now are consider stepchildren of the brand.

you would end up at the new brand service department (if they had separate buildings) because that is where the staff that knows the Genesis line would be located....

I wouldn't expect the Techs which have been trained on the Genesis would stay at the Hyundai dealers so the new dealer would need to train new staff .

 

[robthoke]

I don't worry as much about a separate line since I would assume that any Genesis would be serviced there regardless of when it was purchased. My concern is with the second option. I live in a relatively small town with only one dealership. Would Hyundai create a "dealership within a dealership" everywhere or just at the larger dealers? One of my main reasons for buying a Genesis was to have the option for local service. I would hate to lose that or not have the amenities available to other owners.

That could be a reality. I'm in a small area as well. Our Dodge dealership was sold to the Chrysler dealer and we lost Lincoln/Mercury. The closest Lincoln dealership is 35 miles away. I know in large cities, 35 miles is the other side of town. If my local dealer decided not to sell or service Genesis, then I'd have to go to Tallahassee or Jacksonville.

 

[jaf323]

New owner here..
Personally I think Hyundai is making extremely smart moves. My take:
1) Upscale cars with current branding and current dealer network is ideal for first 3-5 years. It is less expensive, creates UPLIFT on their bread and butter lineups, gives dealers a chance to man up if they can before a split, redirects funds to the cars and less to marketing...all sorts of benefits come from it.
2) Split is a MUST, at some point. Early adopters shop value, make great evangelizers, and lead to conquest sales but the HUMP of the market values the badge, and all of the pretentious pomp and "exclusivity" appeal that comes with it.
3) Established brands (elephants) must miss a step before you go in for the kill. Toyota is just about ripe (see latest recall on Lexus). One is all you need, two would be better, but Lexus conquest is much easier than Euro-buyers; remember that Lexus buyers were once Eurobrand buyers, and are less loyal to their brand.

Car of the year was a shot across the bow. My bet is we'll see a brand emerge within the next two years, as long as sales are robust (they should be) and Hyundai succeeds in changing its image on the bread-and-butter lines.

PS: I can't imagine how they're making money on the Genesis.

 

[BacktoHyundaibychoice]

What Jaf said.

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