Hyundai’s Genesis goes off on its own as a distinct luxury brand for 2017

Article by Andrew Christian, on November 12, 2015

Hyundai Motor is launching Genesis as a stand-alone luxury brand. Using a name that is already associated with the brand is quite a departure from what other automakers have done when they decided to form a luxury brand. Case in point: Nissan’s Infiniti, Toyota’s Lexus, and Honda’s Acura.

But apparently, Hyundai wants people to know that the luxury vehicle they’re considering is built by the South Korean mass-market automaker. In fact, it won’t be selling its Genesis luxury cars at newly built exclusive showrooms just for the brand. What Hyundai plans is for these vehicles to be sold via existing dealerships for the 2017 model year.

It’s about time for Hyundai to launch a stand-alone brand; it has already spent 15 years developing and improving on its luxury cars. Last August, Hyundai was at the Pebble Beach Concours d'Elegance to present the Vision G luxury concept.

At the event, Hyundai's California design studio head Chris Chapman said that the automaker doesn’t want to follow what others have done for their own brands. By 2020, there will be six models available from Genesis. This move is a natural transition as luxury brands are highly profitable and are capable of significantly boosting a business.

Also, Hyundai believes that it will become a more prestigious brand as a result of Genesis’ high-end range. Hyundai Motor Group’s president and chief designer Peter Schreyer said that they see it as the “icing on the cake.” However, Hyundai has its work cut out for it. Even with the current boom in luxury auto sales, Hyundai doesn’t have the name recognition or the long history of its rivals.

According to Ian Beavis, chief strategy officer at automotive consultancy AMCI, the Japanese brands Honda, Toyota and Nissan breezed through when they were launching their luxury brands because the established German automakers didn’t see them as serious competition.

Beavis explained that Hyundai doesn’t have this advantage as the brand is regarded to be highly capable and it’s known to have more than enough resources at its disposal. It’s a tough segment to be entering now as it competes with Lincoln, Alfa Romeo, and Cadillac that all have the financial support of their parent brands amounting to billions of dollars.

What some Asian automakers have done was to acquire brands such as Volvo, Jaguar, and Land Rover. Beavis said that for Genesis to do well in this segment, it has to have a unique philosophy and brand guarantee.

Last week, Hyundai said that the path that Genesis will take will concentrate on offering “simple, personalized experience and attentive service” rather than fitting in as many technologies as they could in the Genesis models. Mike O'Brien, vice president of corporate and product planning at Hyundai Motor America, elaborates on this concept, saying that Genesis will value customers’ time above everything else.

Genesis’ strategy includes a plan for its lineup to be offered in ladders, similar to BMW’s 3 series, 5 series and 7 series. At the top level, there is the Hyundai Genesis (which will soon be known as the G80) and a redesigned Equus (to be renamed G90).

The third level will feature the G70 (a smaller sedan), which will then be followed by coupe, a midsize crossover and then with a bigger SUV. Last June, Luc Donckerwolke became a part of Hyundai and one of his responsibilities is to give the Genesis vehicles its own distinctive style.

In case you didn’t recognize the name, Donckerwolke used to be a Volkswagen designer and is credited for having created the Lamborghini Murciélago and the existing Bentley Flying Spur. So far, Hyundai hasn’t made any final decisions on how it will organize Genesis’ US sales distribution channels in the long term.

The automaker realizes that this strategy is investment-heavy and may affect its financial standing in the U.S. Through October 2015, a total of 1.6 million luxury vehicles were delivered in the U.S.

Of this figure, about 50% were crossovers (with a 21% increase) and SUVs (with a 16% hike). Even if Genesis will later have 6 nameplates, it will be a challenge to go up against the more than 12 lines each of BMW, Audi, and Mercedes-Benz.

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