Hyundai Will Have to Rebrand Genesis or Fail

[in2data]

For the last six months we've been looking at buying a Genesis. We've driven several and they are very nice cars. A lot of features for the price point.

But that's the point. If they want to be a Lexus/BMW/Benz killer they have to behave like dealers in that orbit.

We've visited seven Hyundai dealers in the SW over the last six months and of those we would only do business with one. Even that one failed in a critical sales area.

Here are some issues we've found:

The salesmen are so blatant in their lies that it's laughable. Just this week we visited a Hyundai dealer and asked as soon as we arrived when the 2010 Genesis would be available. Of course he had to "ask the sales manager" and they said in six months. I guess they're going to hold them in Long Beach for five months? Then we asked if we ordered a 2010 model when we could expect it to arrive. The answer was just one month. Guess those must arrive by time warp?

How about the price lies. Every dealer we visited had some really outrageous prices posted on the window. For a V8 tech package we saw from 46K to 48K on the window. Even though the list price was always 42K from Hyundai they had various terms for additional dealer profit usually something along the lines of "Market Adjustment". In all cases when the dealer saw we would walk instead of even discuss that price the price immediately dropped to 42K. We could have stayed to haggle for a few hours and arrived at the real price of 39-40K.

But that's the next point. If you want to play with Lexus/BMW/Benz then you cannot insult your customer. Hyundai should know that data is ubiquitous since Korea is one of the most internet connected countries in the world. The days of hide and seek are over in car sales.

The Hyundai sales people are untrained bordering on out right rude. Except for one dealer they did not even have the common courtesy to hold a door for a lady. That may sound petty but that's a basic tenant of behavior. Except for one dealer the sales people thought they could bully us into a negotiating position that was some script they had been taught by the sales manager. The old let's get the price, trade in and financing rolled into one big ball we can confuse you on. That unfortunately still works on most of the customers Hyundai sees. But if they want to get to the Lexus/BMW/Benz customers then that's a totally different ball of wax.

So we were faced with six dealers we could not trust to deal with any problems we may have had once we purchased a Genesis. If they treated us like a rube when we walked onto the lot then what could we expect once they had our money and we had their car?

How did the seventh dealer fail in a critical sales area? They did not have in stock the exterior/interior color combination we wanted. They said they would find a car with those and call us back. They did not call us back. Even if they called back to say they could not find one it would be better than no call at all.

So we gave up on Hyundai. Customer service upfront is indicative of customer service on the back end.

We only posted this because we would really like to see Hyundai break through that "luxury brand" barrier. My wife is from Korea and we even lived in Osan for awhile. But Hyundai is making a huge mistake in not rebranding like Toyota did for Lexus. They cannot expect to reform the current Hyundai dealers into anything approaching a Lexus/BMW/Benz dealer.

Toyota is now squeezing the gap between Toyota and Lexus. That means a Lexus killer like Genesis not only has to keep up with Lexus but also stay ahead of Toyota. When you can get 90% of a Genesis for 18K less than a Genesis but with 120% of the customer/dealer experience then the Genesis is in trouble.

Like we said the Genesis is a really nice car. But there have been a lot of really nice cars that have failed.

 

[dataguy]

Toyota is now squeezing the gap between Toyota and Lexus. That means a Lexus killer like Genesis not only has to keep up with Lexus but also stay ahead of Toyota. When you can get 90% of a Genesis for 18K less than a Genesis but with 120% of the customer/dealer experience then the Genesis is in trouble.

And which car would that be? You're certainly not talking about an Avalon if you're suggesting a base sticker price of $15K, or a loaded of $24K.

 

[wallymn]

A different experience.... My local dealer didn't plan on carrying v-8s (they were up front about it) so I had to travel to another dealer about 140 miles away. I called ahead to confirm the car I wanted (based on their online inventory was still in). When I arrived there was a hold sticker on the car with my name on it. Quickly arrived at a price for the car (39,500 back in Jan.) and I was out the door in less than 2 hours... (Detailing for delivery was a good part of this time)

My experience during the sale was limited to one sales rep (nice man knew the product well and the finance manager (trying to get me to finance rather than pay cash)...

Service is performed at my local dealer which I have been happy with.

Every dealer is unique, no matter the brand problems can occur.

Example. I wanted a BMW in 2008, My local dealer assured me they had the car 535xi in the color I wanted on another lot. I left a deposit and then was run around for 4 months without the dealer delivering the car at the agreed price (they tried to change the price on many occasions). In the end I didn't buy and wrote that dealer off. (after getting my deposit back)...

3 months later I bought the Genesis...

 

[SterlingDave]

For the last six months we've been looking at buying a Genesis. We've driven several and they are very nice cars. A lot of features for the price point..... (Lot of post deleted)

We only posted this because we would really like to see Hyundai break through that "luxury brand" barrier. My wife is from Korea and we even lived in Osan for awhile. But Hyundai is making a huge mistake in not rebranding like Toyota did for Lexus. They cannot expect to reform the current Hyundai dealers into anything approaching a Lexus/BMW/Benz dealer.

But there have been a lot of really nice cars that have failed.

I'm sorry that your attempted Hyundai dealings were such a failure. It's hard to imagine that one could find so many "bad" dealers: seven out of seven is amazingly bad luck. Surely your standards are not too high.

IMHO, you'd have much better luck getting a Genesis brand by trying to convince Hyundai (HMA) that Genesis needs to be "rebranded" than the folks in this forum. It has been suggested many times that it would be a good strategy for Hyundai. I'm almost certain that you'd get a unanimous agreement from us forum folk.

Just to satisfy my curiosity, which are some of the really nice cars that have failed?

 

[wallymn]

I agree that a Genesis (or premium brand) for Hyundai is needed, but for me, I might not have purchased a Genesis if there was a premium price with the premium brand.

Not a marketing guy but Hyundai must have look at the loss/gain of sales with a new brand (against startup costs) and the numbers didn't work.

 

[sandy]

I'm sorry that your attempted Hyundai dealings were such a failure. It's hard to imagine that one could find so many "bad" dealers: seven out of seven is amazingly bad luck. Surely your standards are not too high.

IMHO, you'd have much better luck getting a Genesis brand by trying to convince Hyundai (HMA) that Genesis needs to be "rebranded" than the folks in this forum. It has been suggested many times that it would be a good strategy for Hyundai. I'm almost certain that you'd get a unanimous agreement from us forum folk.

Just to satisfy my curiosity, which are some of the really nice cars that have failed?

A peek at Hyundai's marketing Strategy would surely help us understand what they have in mind insorfar as "rebranding". Lacking that, it would seem to me that they are approaching things in this market (USA) on a first-things-first basis. Hyundai's #1 problem here is poor brand imagery and very low consumer trial (customers even willing to come look at a Hyundai product). Near term, the number of Genesis/Equus units they can sell will be minimal as will the incremental volume and profit contributions they generate.

Their significant return on investment in "premium models" will be the halo effect on their bread and butter...the volume models they sell.

I never would have considered a Hyundai...until I started reading about the Genesis. And now that I own one, I am a huge fan and one of the many word of mouth brand builders for Hyundai.

Longer term, who knows? Do they really want to be in the luxury market or do they want to concentrate on maximizing sales of the Elantra, Santa Fe, etc? If they want to go up-scale, I would agree their current dealer network would have to be up-graded. And I am sure they know that.

 

[blasterguam]

I would love for them to make it a premium brand, as I am not receiving the same level of service that I received from my Lexus I traded in. What nobody seemed to mention was the fact that once a premium brand is established, then a lot of the great priced we are getting will be a thing of the past. A premium dealership costs the dealer lots of money...and right now we are all enjoying the dealership cost spread across every Hyundai that is sold. So while I'd love to have my cake and eat it too, the $4K+ that I saved will be a thing of the past. Ultimately we all get our cars serviced, although with a little aggravation at times. I'm loving the price I paid for a premium sport sedan, and I do miss getting my a$$ kissed at the Lexus dealership, but not for another $4K. I'm fence sitting on this issue right now. It will happen, but then we'll all be crying the blues when the prices go up!

 

[Pahaska]

I have gone from Sonata to Azera to Genesis using 2 locations of the same dealership and my dealer experience has always been positive.

For the Genesis, my salesman was knowledgeable, pleasant, and low pressure. The car was about $4500 off sticker (July '09).

 

[jjsC6]

Interesting thread. I've been to two different Hyundai dealers in the past two days, and so far was pretty impressed (one is a Cadillac dealer who just picked up the line).

BTW, I've bought three Infinitis, and one of the dealers acted like they were part of the late Bill Heard dealerships (google them if you don't know what I mean). Another one gave me such poor service on a problem I had that I was dumfounded - worse than any other dealer I've ever been to, and I've owned a lot of Chevy's.

I'd love for Genesis to be a premium brand, but as someone said above, if it was, we probably wouldn't be here. The only reason I don't have a Lexus GS is because I don't want to spend $52k on a car - I want $40 or less.

Be careful what you ask for. It's fine to criticize dealers, but it's a separate issue to me. There are liars at all brands - I've been in plenty of BMW, Mercedes and Lexus dealers. They dress better and have really nice coffee - but they still have plenty of liars.

 

[Mark_888]

I know that one should not generalize about dealers, or the individuals who work at dealerships, because they are all different. But I do think there is some truth to what the OP has said. The problem IMO is that Hyundai dealers have traditionally dealt with customers who could not afford a Honda or Toyota and was extremely price motivated. Many Hyundai customers don't have a lot car buying experience so they fall for every trick in the book. Then when a sophisticated customer comes in looking at the Genesis, they just don't know how or when to shift gears.

It is not economically feasible to create a separate group of dealerships (either for HMA or for the dealers). They would have to raise the price of the car $5K, and then it no longer looks quite as attractive compared to the competition.

But HMA and the dealers can set up a separate group of sales and service personnel at each dealership who could be specially trained on how to deal with more upscale customers and to provide better service to them.

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[smillerathome]

in2data,

Your experience is way different than mine, also in the southwest. I am in Phoenix, and saw the car first at Larry Miller Hyundai in Peoria,AZ. Sales people were pleasant, but wanted to sell off the lot, and didn't have what I wanted. But I got to do 3 test drives in V6's and V8's, and I don't recall any lies or any rudeness. Not the best place to get a great price though.

I went to 4 dealerships in SoCal: two were great, one was a little shady, and one was a joke (Santa Barbara).

When it came time to deal, I only worked with internet sales people. I got the Costco member price in Phoenix, but it wasn't close to what I could get in CA.

The internet sales guy at Glendora Hyundai (Pierce Caine) offered me a V6 w/tech for $35.5, back in June. Thats $4500 off MSRP, about $2K below invoice, in my choice of color. He gave us 5 years of free oil changes. He needed 24 hours to get it, on his day off. It was waiting for us when we got there. We spent about an hour at the dealership. I really can't ask for better treatment than that.

Compare that to our local Lexus dealer, who wouldn't budge from MSRP, and the one in CA who wanted $2500 over invoice, even through their Costco program. Their showrooms are nice, but they are simply uncooperative.

And Toyota dealers are the crookedest you will find anywhere. I can tell you a real horror story about the one in Costa Mesa.

 

[ajls09873]

Hyundai need new luxury brand.
They need seperated brand/dealer shop.
Because people still says, "It is still a hyundai..."

However, it have 2 major problems.

1. build a new luxury brand is freaking expensive. (I heard it requires 3 billions dollars.) even if this car praised by so many motoring journalists, Genesis sedan is not a volume seller model. Total Genesis models are still less selling than one single Lexus ES (glorified camry) model.

2. many hyundai dealers strongly want keep Genesis/Equus from their dealer shop. because they also want 'halo' cars. if HMA decide to withdraw genesis sedan /equus from current hyundai dealers, then what happen next? maybe this is the 2nd problem.

 

[GripperDon]

in2data,

Your experience is way different than mine, also in the southwest. I am in Phoenix, and saw the car first at Larry Miller Hyundai in Peoria,AZ. Sales people were pleasant, but wanted to sell off the lot, and didn't have what I wanted. But I got to do 3 test drives in V6's and V8's, and I don't recall any lies or any rudeness. Not the best place to get a great price though.

I went to 4 dealerships in SoCal: two were great, one was a little shady, and one was a joke (Santa Barbara).

When it came time to deal, I only worked with internet sales people. I got the Costco member price in Phoenix, but it wasn't close to what I could get in CA.

The internet sales guy at Glendora Hyundai (Pierce Caine) offered me a V6 w/tech for $35.5, back in June. Thats $4500 off MSRP, about $2K below invoice, in my choice of color. He gave us 5 years of free oil changes. He needed 24 hours to get it, on his day off. It was waiting for us when we got there. We spent about an hour at the dealership. I really can't ask for better treatment than that.

Compare that to our local Lexus dealer, who wouldn't budge from MSRP, and the one in CA who wanted $2500 over invoice, even through their Costco program. Their showrooms are nice, but they are simply uncooperative.

And Toyota dealers are the crookedest you will find anywhere. I can tell you a real horror story about the one in Costa Mesa.

I live in Scottsdale, I understand you bought at Glendora Hyundai. Where is that? I am looking to get a 2010 IF the SUSPENSION IS CHANGED and would like a dealer different than the one I used. Thanks Grip.

 

[Sal Collaziano]

I know exactly what the original poster means.. And so does Mark.. Most of these Hyundai sales people do NOT know how to deal with the type of customers who buy vehicles like the Genesis. They NEED specialized people to deal with this type of customer. My intelligence is insulted every time I walk into a Hyundai dealership. Maybe I'm an *******. But I buy expensive vehicles - so it shouldn't matter. They need to learn how to deal with *******s like me.

The reason why Hyundai isn't setting up a separate brand is because they really don't care how many Equus cars they sell. They just want to show-off and bring people into dealerships to buy Accents. It's a sad reality that most of us will not want to believe - but it's true. If the Equus sells like hotcakes, they'll likely consider setting up a new brand.

For the last six months we've been looking at buying a Genesis. We've driven several and they are very nice cars. A lot of features for the price point. But that's the point. If they want to be a Lexus/BMW/Benz killer they have to behave like dealers in that orbit. We've visited seven Hyundai dealers in the SW over the last six months and of those we would only do business with one. Even that one failed in a critical sales area.

The problem IMO is that Hyundai dealers have traditionally dealt with customers who could not afford a Honda or Toyota and was extremely price motivated. Many Hyundai customers don't have a lot car buying experience so they fall for every trick in the book. Then when a sophisticated customer comes in looking at the Genesis, they just don't know how or when to shift gears.

HMA and the dealers can set up a separate group of sales and service personnel at each dealership who could be specially trained on how to deal with more upscale customers and to provide better service to them.

 

[sandy]

I know exactly what the original poster means.. And so does Mark.. Most of these Hyundai sales people do NOT know how to deal with the type of customers who buy vehicles like the Genesis. They NEED specialized people to deal with this type of customer. My intelligence is insulted every time I walk into a Hyundai dealership. Maybe I'm an *******. But I buy expensive vehicles - so it shouldn't matter. They need to learn how to deal with *******s like me.

The reason why Hyundai isn't setting up a separate brand is because they really don't care how many Equus cars they sell. They just want to show-off and bring people into dealerships to buy Accents. It's a sad reality that most of us will not want to believe - but it's true. If the Equus sells like hotcakes, they'll likely consider setting up a new brand.

I'm trying to figure out what an ******* is? If it's elitist, that's not a dirty word.

 

[YEH]

The reason why Hyundai isn't setting up a separate brand is because they really don't care how many Equus cars they sell. They just want to show-off and bring people into dealerships to buy Accents. It's a sad reality that most of us will not want to believe - but it's true. If the Equus sells like hotcakes, they'll likely consider setting up a new brand.

That's not the case.

Hyundai has been itching to launch a premium brand sooner than later in the States, but it has been the suits over at Hyundai USA who have told their higherups that the US is NOT quite ready for a premium brand from Hyundai (which I agree with).

In order for a premium brand from Hyundai/Kia to have credibility and a better chance of success from the onset, Hyundai/Kia first needs to (1) pull up their image/reputation for reliability on par w/ or at least close to that of the 3 big Japanese makes back when they launched their premium brands, (2) enlarge and improve its dealer network (Hyundai/Kia should focus on getting their own dealer networks in shape before attempting the Herculean task of starting a new brand/dealer network) and (3) gain sales/marketshare in the US in order to better subsidize the cost of launching a new brand/dealer network.

In addition, Hyundai/Kia needs to have a couple of more "premium" models (including 1 or 2 high volume models) before launch so that the new brand will have enough cars moving off the lots to support the dealerships.

Also, people who end up buying an Accent probably wouldn't have heard of the Equus and the fact that the Equus exists wouldn't have an impact on their decision.

 

[Onedurwho]

Strange example but I remember when blue jeans were for lower income folk to work in. Then you wake up and Calvin Klein has smacked his name on a pair and all of a sudden I'm looking for the Huskey brand just to be able to afford freekin' jeans! I think the Genesis IS giving us our cake and letting us eat it too...all suger-sweet in it's glory! And I'm loving every bite I take every day. Excuse me...but do you have any Grey Poupon'? (yeah...I'm feelin' like one of 'em now and knowing I have more money in my pocket is a super dooper feeling!)

 

[smillerathome]

I live in Scottsdale, I understand you bought at Glendora Hyundai. Where is that? I am looking to get a 2010 IF the SUSPENSION IS CHANGED and would like a dealer different than the one I used. Thanks Grip.

Glendora is in CA, about 25 miles east of Pasadena, 350 miles from Phoenix. Just ask them for a temporary CA title ($15) which gives you 10 days to get it out of the state. Then take it to the AZ MVD to register it there. The only downside is you have to pay CA sales tax which is now 9.25% thanks to their budget woes. But no sales tax in AZ. One other tip -- make sure you get the mfg proof of ownership certificate from the dealer. They don't use those in CA, but AZ requires it. They had to overnight it to us and we needed two trips to the MVD to get it registered.

I don't know what they'll want for a 2010, but they were $2k+ less than any other dealer, even in CA. It turns out I could've gotten almost as good a price locally via the Hyundai Think Tank Affiliate Program, but I didn't know about it at the time.

Tell him I sent you,
Steve

 

[mikec]

When Toyota and Honda both created upscale divisions, they had a few things going for them:
1: most folks in the US knew Toyota and Honda both made quality vehicles. Their reputation at that time was pretty darn good. They'd long since grown past their early reputation as "cheap but decent" cars to "just darn good cars."

2: The model ranges for Toyota and Honda covered quite a bit of the spectrum: from basic entry-level to fairly "nice" cars. Not what would be considered "luxury" today but they were luxury back then. Cars like the Cressida for example.

Where is Hyundai compared to that? Half of the US population still thinks of Hyundai as "cheap" and not even "cheap but decent" let alone "darn good cars." There are still many folks that think of the first generation US Hyundai cars as representative of today's Hyundais. Then there are those that have first or second-hand knowledge of Hyundai's more recent vehicles and how far they've come. That portion of the car buying public though isn't the majority yet... Hyundai needs another 5 to 10 years to get public perception to where Toyota and Honda were when they created Lexus & Acura. As of now though Hyundai has the full range of car models. Again though that's recent enough that most of the car buying world still thinks of Hyundai as being a "small economy car company." The Genesis, Azera, Entourage, etc. haven't been around long enough for folks to think beyond "Hyundai = entry-level econoboxes." The Genesis coupe will probably do more to gain public perception for Hyundai than any other car, including the Genesis sedan. The sedan is doing well with the auto mags & reviews... but how many households subscribe to car magazines? Probably just a small percentage really. With younger folks getting excited over the coupe, they'll spread the word faster - and convince their folks "go look at a Hyundai - they're more than just Accents these days."

Remember Amati? That was supposed to be Mazda's high-end brand in 1993 or so. It was ditched mostly because of start-up costs since Mazda was struggling. How big was Mazda at that time compared to today's Hyundai? Probably similar in terms of overall market share.

As a company, Hyundai is more than just automobiles. Hyundai makes something like 3 out of every 4 ocean cargo vessels (container ships) these days, as well as the cranes & other seaport stuff required for their use. They are a HUGE company... their production plants rival the old Ford River Rouge concept - like that old Ford plant Hyundai's shipyards build darn near every part from scratch. As a giant company, I'm sure Hyundai has the money necessary to launch an upscale division. The "Hyundai Cars" portion may not be quite so wealthy. And even if they did have the cash on hand, public perception of Hyundai automobiles is not where it needs to be to have Hyundai's upscale division taken seriously. Yet.

From some of the posts on this thread, and on other threads, Hyundai needs to start auditing its dealer network and getting them under control. The dealer is "the face of the company" as far as most car buyers are concerned... even if the dealer is technically a separate entity. A dealer that ticks off a customer has probably permanently made that customer anti-Hyundai. Too many dealers (all car brands, not just Hyundai) out there still operate under the old intimidation and "there's a sucker born every minute" scam-artist attitude... if Hyundai can weed out those dealerships and get the remaining ones acting courteously and professionally that'll do more for their image in the immediate future than anything.

mike c.

 

[genesismuse]

If they have not passed it, I think Hyundai is close in North America to getting to the point where they are know as good car, good value. Genesis may or may not achieve parity with the folks it would like to compete against (it won't in the short term), but it certainly seems to be providing the halo effect that it was hoping for. The Santa Fe has got to be one of it's most successful cars, I see these everywhere. I was in Nice 2 years ago and they were all over the place, including being used as taxis - they were all diesel as well.

BTW, don't look know but they are the 4th largest auto manufacturer in the world.

I was recently at a Nissan / Infiniti dealer - both under one roof. It was temporary while they build a new dealership right next door, but it was an interesting model. One drawback I saw is that the local dealers here in Mississauga (just outside Toronto) have small, older-looking facilities that could at minimum use a face lift. Perhaps this would be a cheaper and more practical option: put some makeup on the old dealers, train a subset of their salespeople and soft separate the two brands under one roof. Thoughts?