Genesis plans clean break from Hyundai

[YEH]

http://www.autonews.com/article/20170807/RETAIL07/170809777/genesis-plans-clean-break-from-hyundai

August 7, 2017 @ 12:01 am
David Undercoffler

LOS ANGELES — Hyundai's fledgling Genesis marque wants out of the nest — now.

This month, the brand plans to announce a new retail strategy for the U.S. that will accelerate its separation from the Hyundai marque and significantly cut the number of dealerships authorized to sell Genesis models.

The transition, which was supposed to be several years off, likely will be messy and costly for Hyundai and the culled Genesis dealers. It comes less than two years after Hyundai announced the creation of the Genesis brand, barely a year after it officially put the G80 and G90 sedans on sale and just ahead of the launch of a critical new vehicle, a BMW 3-series fighter called the G70.

And it will require a delicate dance by Hyundai Motor America to protect its relationships with castoff dealers, who will retain their Hyundai franchises after the dust settles.

Genesis’ retail network is a bit of a tangle, owing to its awkward start as a Hyundai nameplate and then a distinct brand that absorbed two Hyundai luxury models. Hyundai allows any of its 835 dealerships nationwide to sell the Genesis G80 sedan, which was formerly called the Hyundai Genesis. Of those stores, 352 also have opted to carry the larger G90 sedan, which requires them to create a showroom-within-a-showroom for the Genesis brand.

This select group emerged from Hyundai’s efforts to create a special retail environment for a top-of-the-line model that was called the Hyundai Equus before Genesis became its own marque.

Under the original plan, Genesis-only stores were to be phased in two to three years after Genesis started selling vehicles last August. Genesis planned to use them concurrently with the showroom-within-a-showroom setup, along with some dealerships that had separate sales facilities for Hyundai and Genesis but shared service centers. Those Hyundai dealers selling the G80 were then to be phased out when the next generation of the car arrived around 2019.

The updated plan moves that timetable forward by one to two years and will focus solely on separating the two makes, though details haven’t yet been made available to dealers, Raphael said.

It will shift from the store-within-a-store approach to a distinct Genesis presence.

Hyundai dealers will be allowed to apply for Genesis franchises, with priority given to locations in and around urban areas.

Only full Genesis franchisees will be able to do warranty repairs on Genesis vehicles, a condition that’s certain to be a sticking point with dealers, who had expected to be able to do factory-paid warranty work on Genesis vehicles under the previous plan.

 

[pmckechnie]

I have read many post about the separation, from Hyundai, some dealers will be able to sell and maintain the Genesis, some not.
I have not seen very many post about how this is going to effect current owners. I have a 2018 G80. Where will I get it serviced
a year from now.
I know, where ever the closest dealer is. I think that Genesis needs to make the decision and make it public so new buyers
can make the decision before purchase. I wouldn't want to buy a car from a dealer 1 mile away for the convenience of maintenance
and then find out later that I will need to go to a dealer 100 miles away.
In other words, put the customer FIRST because that is where their money comes from.

 

[jimmy buoy]

I suspect that the accelerated business strategy will likely accompany an ever increasing retail price of the vehicle. It's unfortunate that many Hyundai dealers have apparently failed to recognize the difference between a typical Hyundai customer and a typical Genesis customer. If the sales/service experience for Genesis prospects and owners at Hyundai dealers lived up to their expectations the move to costly stand-alone dealerships might not have ever been necessary. Ultimately, the customer will foot the bill and the vehicles (IMHO) won't be as much of a unique value proposition as they are currently.

 

[Mark_888]

I suspect that the accelerated business strategy will likely accompany an ever increasing retail price of the vehicle. It's unfortunate that many Hyundai dealers have apparently failed to recognize the difference between a typical Hyundai customer and a typical Genesis customer. If the sales/service experience for Genesis prospects and owners at Hyundai dealers lived up to their expectations the move to costly stand-alone dealerships might not have ever been necessary. Ultimately, the customer will foot the bill and the vehicles (IMHO) won't be as much of a unique value proposition as they are currently.

Even if the MSRP prices don't up much, the discount from MSRP will be much less than at a Hyundai dealership. They will have to start paying employees more to get ones who are able to properly deal with luxury car customers and to offer a better selling and service experience. The economy of scale of a Genesis dealership will also be much less, as compared to a Hyundai dealership.