Dealership Model Approaching Customers as 'Invited Guests'

[nixit]

Genesis Tries a Dealership Model Approaching Customers as 'Invited Guests,' Not Buyers

All the luxury, white space, and elegance at the newly opened flagship in Lafayette, Louisiana, is about selling cars, but beautifully.

www.caranddriver.com

 

[Mcc]

Genesis Tries a Dealership Model Approaching Customers as 'Invited Guests,' Not Buyers

All the luxury, white space, and elegance at the newly opened flagship in Lafayette, Louisiana, is about selling cars, but beautifully.

www.caranddriver.com

I’m sure there will be plenty who will criticize this article and this Genesis strategy but in my opinion it’s a big step in the right direction.

 

[PMCErnie]

Genesis execs can’t seem to make up their mind how many dealers they want. One hundred dealerships nation-wide isn’t going to work. Consider that too many current and happy owners are already being left stranded after watching the dealership where they bought their vehicle tossing them out.

Instead, it would seem that Genesis is looking to have 100 pretty, brand new, glass palaces scattered around the country. Maybe they think they are in the architecture business?

 

[EdP]

Genesis execs can’t seem to make up their mind how many dealers they want. One hundred dealerships nation-wide isn’t going to work. Consider that too many current and happy owners are already being left stranded after watching the dealership where they bought their vehicle tossing them out.

Instead, it would seem that Genesis is looking to have 100 pretty, brand new, glass palaces scattered around the country. Maybe they think they are in the architecture business?

The original plan I thought was 100 dealers. Lexus has 244, Mercedes 383, Audi 304.

If the plan is 100 pretty places for a nice image, it could help the brand and still sell through some of the present Hyundai stores. As you point out, many already have to travel too far so 100 is not going to work.

Given some of the stories here probably some of the dealers should have been dumped, but not all.

 

[csu87]

considering genesis sold only ~50k cars last year, you cant expect them to have the same number as lexus (sold ~330k), mercedes (~276k) and audi (~196k). They are closer to the volume of mini (~35k) and infiniti (~60k) in terms of volume. Mini has about 100 locations, a lot of which are paired with other brands at their dealerships. Infiniti has ~200, and a lot are paired with nissan dealerships.

 

[EdP]

considering genesis sold only ~50k cars last year, you cant expect them to have the same number as lexus (sold ~330k), mercedes (~276k) and audi (~196k). They are closer to the volume of mini (~35k) and infiniti (~60k) in terms of volume. Mini has about 100 locations, a lot of which are paired with other brands at their dealerships. Infiniti has ~200, and a lot are paired with nissan dealerships.

It is complex. First, does Genesis have the capacity to build the same number as Lexus? I've recently seen some advertising so they do want to show off more than they did in the past.

You have to grow demand and build the system to support it. Right now, 100 dealers is a decline even though some existing low volume sellers would not survive as a stand alone. Stand alone for image, dual brand dealers for convenient location may be a good fit. You need the potential volume to support the stand alone.

 

[PMCErnie]

Genesis had backed off on that 100 dealers plan. Now they seem to be resurrecting it. Can’t they make up their minds?????

Nothing is wrong with dual dealerships if they are good quality locations. Most all here purchased their vehicles from a Hyundai/Genesis dealer. Sure, major improvements are needed with dealerships, but is “battlefield amputation” the cure?

Does anybody believe that killing off your current local combo-dealer will make existing owners (like you) eager to buy another Genesis?

 

[csu87]

It is complex. First, does Genesis have the capacity to build the same number as Lexus? I've recently seen some advertising so they do want to show off more than they did in the past.

You have to grow demand and build the system to support it. Right now, 100 dealers is a decline even though some existing low volume sellers would not survive as a stand alone. Stand alone for image, dual brand dealers for convenient location may be a good fit. You need the potential volume to support the stand alone.

i mean, even if they doubled production, which isnt happening for anyone with the current material shortages, thats still only 100k cars. Thats 1k cars average per year per dealer if they go with the 100 dealer plan. thats a good enough roi for a dealership. if you add another 100 dealers, thats 500 cars a year. just assume a random $10k markup over invoice for genesis, and dealers are making $5mill/yr before paying staff, paying for the building, etc. Thats not going to go far and will lead to even more service/experience issues.

 

[nixit]

Genesis execs can’t seem to make up their mind how many dealers they want.

Genesis closed two dealerships in the Chicagoland area recently.

 

[nixit]

It is complex. First, does Genesis have the capacity to build the same number as Lexus? I've recently seen some advertising so they do want to show off more than they did in the past.

You have to grow demand and build the system to support it. Right now, 100 dealers is a decline even though some existing low volume sellers would not survive as a stand alone. Stand alone for image, dual brand dealers for convenient location may be a good fit. You need the potential volume to support the stand alone.

There has to be a way for Hyundai and Genesis to co-exist in the same space but offer distinct user experiences. It could be as simple as having a more defined space in the entire showroom. The service drop-off needs to feel more luxurious, but once they hand over the keys to the mechanic, I don't care the garage is shared.

Offer a distinctive front-end experience (sales, service support) and combine the back-end (finance, service execution).

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[Trixie86]

Genesis closed two dealerships in the Chicagoland area recently.

Which 1s?

 

[nixit]

Which 1s?

Elmhurst (Wilkins) and Countryside (Ettleson). Both are now just Hyundai dealerships. Strange because both are in new constructions buildings built in the last five years.

 

[Mcc]

Genesis had backed off on that 100 dealers plan. Now they seem to be resurrecting it. Can’t they make up their minds?????

Actually you said it your self. Backing off just meant they delayed it. The idea was right but the time was wrong. Now they are coming back, they never changed their mind.

Nothing is wrong with dual dealerships if they are good quality locations. Most all here purchased their vehicles from a Hyundai/Genesis dealer. Sure, major improvements are needed with dealerships, but is “battlefield amputation” the cure?

Dual dealers are just not going to work period. Yes it is going to take something like and yes it’s drastic.

Does anybody believe that killing off your current local combo-dealer will make existing owners (like you) eager to buy another Genesis?

Well I do. And that might mean that not everyone who wants one will be able to buy one because there is no dealer nearby. But everyone who can buy one will be a lot happier with the sales and service experience. The combo idea needs to die As quickly as possible (Which can’t be quick enough).

 

[Trixie86]

Elmhurst (Wilkins) and Countryside (Ettleson). Both are now just Hyundai dealerships. Strange because both are in new constructions buildings built in the last five years.

Wow, looks like Gerald in North Aurora will be getting 1

 

[PMCErnie]

There has to be a way for Hyundai and Genesis to co-exist in the same space but offer distinct user experiences. It could be as simple as having a more defined space in the entire showroom. The service drop-off needs to feel more luxurious, but once they hand over the keys to the mechanic, I don't care the garage is shared.

Offer a distinctive front-end experience (sales, service support) and combine the back-end (finance, service execution).

Precisely.

 

[PMCErnie]

Actually you said it your self. Backing off just meant they delayed it. The idea was right but the time was wrong. Now they are coming back, they never changed their mind.

Dual dealers are just not going to work period. Yes it is going to take something like and yes it’s drastic.

Well I do. And that might mean that not everyone who wants one will be able to buy one because there is no dealer nearby. But everyone who can buy one will be a lot happier with the sales and service experience. The combo idea needs to die As quickly as possible (Which can’t be quick enough).

I think your perspective is that this mess will/may not inconvenience you personally. However, plenty of current owners are now, or will soon be, finding themselves without a dealership within a decent driving distance. “SURPRISE, SURPRISE!” as Gomer Pyle used to say.

Did you happen to read any announcement that Genesis was returning to their 100 dealer plan AFTER retracting that plan a couple of years ago? I did not.

 

[Mcc]

I think your perspective is that this mess will not inconvenience you personally. However, plenty of current owners are now, or will soon be, finding themselves without a dealership within a decent driving distance. “SURPRISE, SURPRISE!” as Gomer Pyle used to say.

Did you happen to read any announcement that Genesis was returning to their 100 dealer plan AFTER retracting that plan a couple of years ago? I did not.

I guess if I were personally inconvenienced then I would have to accept that or buy a different car just as I would expect anyone else would. I could wish it were different but wouldn’t expect Genesis to change its business plan to one that would ultimately lead to failure. For the same reasoning, I would not expect them to drop their prices by $10-20k just because I can’t afford it.

Others track announcements, sorry I don’t unless I read it here.

 

[PMCErnie]

I guess if I were personally inconvenienced then I would have to accept that or buy a different car just as I would expect anyone else would. I could wish it were different but wouldn’t expect Genesis to change its business plan to one that would ultimately lead to failure. For the same reasoning, I would not expect them to drop their prices by $10-20k just because I can’t afford it.

Others track announcements, sorry I don’t unless I read it here.

I guess my perspective is that their 100 dealer plan is a fast track to failure.

There are several posts in this thread that reinforce my opinion.

Performance Genesis coming? And more on the dealership situation...

https://www.motortrend.com/news/genesis-high-performance-future-model/ A # of things not correct, or still up in the air... Remains to be seen if the GV60 or the GV70e (MT refers to it as the eGV70, but Genesis switched things around) will be the 1st Genesis electric CUV; and it's not a rumor...

genesisowners.com

 

[YEH]

Genesis execs can’t seem to make up their mind how many dealers they want. One hundred dealerships nation-wide isn’t going to work. Consider that too many current and happy owners are already being left stranded after watching the dealership where they bought their vehicle tossing them out.

Instead, it would seem that Genesis is looking to have 100 pretty, brand new, glass palaces scattered around the country. Maybe they think they are in the architecture business?

As stated, the 100 or so dealerships was the original plan (prior to the lawsuit), but post lawsuit, Genesis had to (unfortunately) let every Hyundai dealership the opportunity to obtain a Genesis franchise, even if they weren't up to par when it came to customer service.

Under the updated scenario, it seems that there will be 100 or so built from the ground up, stand alone dealerships, but there will still be another 200 -250 dealerships either stand alone (but in existing structures - such as O'Gara) or sharing a lot with the Hyundai dealership, but having a separate showroom and customer lounge (this is for the smaller volume or not deep pocketed, small family dealerships).

Genesis has already been culling the franchises which didn't have the resources to even build out a shared lot store, so figure with additional culling, we'll ultimately end up with around 300 dealerships in total.

Note how the Hyundai dealership owned by the same dealer group which built the 1st ground up, stand alone store has gotten high ratings.

That has more to do re customer service at Genesis dealerships than any fancy new facilities, whether stand alone or on a shared lot.

 

[PMCErnie]

As stated, the 100 or so dealerships was the original plan (prior to the lawsuit), but post lawsuit, Genesis had to (unfortunately) let every Hyundai dealership the opportunity to obtain a Genesis franchise, even if they weren't up to par when it came to customer service.

Under the updated scenario, it seems that there will be 100 or so built from the ground up, stand alone dealerships, but there will still be another 200 -250 dealerships either stand alone (but in existing structures - such as O'Gara) or sharing a lot with the Hyundai dealership, but having a separate showroom and customer lounge (this is for the smaller volume or not deep pocketed, small family dealerships).

Genesis has already been culling the franchises which didn't have the resources to even build out a shared lot store, so figure with additional culling, we'll ultimately end up with around 300 dealerships in total.

Note how the Hyundai dealership owned by the same dealer group which built the 1st ground up, stand alone store has gotten high ratings.

That has more to do re customer service at Genesis dealerships than any fancy new facilities, whether stand alone or on a shared lot.

Yes, this is more in line with the “corrected” plan that Genesis announced a few years ago, pre-Covid. But why, then, didn’t their announcement about the new Lafayette, Louisiana dealership mention that. Obviously it was greatly misleading! Who is running their PR show there, Captain Ahab?