Genesis Australia non-negotiable on prices

Luxury market newcomer Genesis insists it will not enter into a discounting war on its models in Australia, despite the practices of key competitors.

The Hyundai-owned prestige marque finally enters Australia this week with a unique factory-direct distribution model that cuts out traditional dealers.

Instead, the new Korean premium brand’s sales will be facilitated through a factory-direct ‘studio’ model, the first of which has opened in Sydney’s Pitt Street Mall.

The structure eradicates the traditional dealer middle man, and will allow Genesis to ensure full transparency with Australian customers, according to global boss Manfred Fitzgerald.

“There’s no such thing as preferential treatment. All customers are the same and they’ll get exactly the same price,” he said.

“There will not be any kind of VIP treatment as we’ve seen elsewhere. Our customers will receive equal pricing and equal service.

“We are in command of that and that is the big difference towards the other manufacturers. We want to control this, therefore we do believe we … have a clear advantage.”

A national dealership network is regular practice for the car industry, including Genesis rivals Alfa Romeo, Audi, BMW, Mercedes-Benz, Infiniti, Volvo and Lexus.

But Fitzgerald believes the Genesis start-up is a timely opportunity to break away from that model, and from traditional practices.

“As the dealers are not part of this, I do not have any answer for that,” he said when pressed on whether dealers were frustrated at the strategy.

“This is our business model and we do not foresee any dealers. The dealers may come in only on the service and we will select the qualified dealers, but they will need to upgrade to our standards.

“They will need to go through our pre-qualification standards.”

Despite Fitzgerald’s hard-line stance on pricing, the message wasn’t clearly communicated at the national launch of the BMW 3 Series-size Genesis G70 mid-size sedan and the 5 Series-size Genesis G80 large sedan, which deliver relatively good value with prices starting at $59,300 and $68,900 respectively.

He was forced to interject when media pressed Australian Genesis officials about discounting.

“We are dealing with a very traditional mindset in terms of customers, who expect to walk into a dealership, look at the car and haggle on price,” said a senior Genesis Australia official.

“For us, our fixed price is something that we want to stay true to, but we are anticipating that customers will no doubt try to negotiate because that’s in our best nature. Some customers will enjoy doing that.

“We might have to navigate that as it comes on. It’s not something that we will advertise.”

Asked whether that strategy was unfair for buyers who chose not to haggle, Fitzgerald took the reins.

“There’s a misunderstanding,” he said. “This is a policy where we have an advantage. If you go into a dealer and find they’ll give you a better price for whatever reason, I find that personally offensive.

“We want to eliminate that.”