Mike Sinclair•16 Jan 2014
NEWS
Genesis to stay Hyundai
Hyundai has no plans to build a stand-alone Genesis brand – in the USA or elsewhereHyundai is planning to keep Genesis close. And the official word comes from the man who presides over Hyundai’s biggest export market and Genesis’ biggest opportunity, David Zuchowski, CEO of Hyundai Motor America.
Speaking to motoring.com.au this week at the North American International Motor Show (NAIAS) in Detroit, Zuchowski reiterated Hyundai’s commitment to keep Genesis as a limited model ‘family’ and not the basis for a Lexus-style breakaway luxury brand. In fact, Zuchowski asserted some brands would re-think the standalone direction if they were building their first premium models today.
“We talked about it [a standalone brand] in the past; [but] we like what we’ve done now, and that is not really part of our discussions anymore,” a matter of fact Zuchowski told motoring.com.au.
“The investment [to create a new brand] from a company perspective is tremendous. The investment from a dealer perspective is tremendous. The splintering at a brand-building effort is really impactful.
“We actually believe that many of our competitors, that have elected to go a different way and create a separate distribution channel for the premium products, might re-think that [if they] had that decision to make today,” he opined.
Hyundai launched the first generation Genesis sedan and coupe in the USA in 2008. It will launch the second generation sedan Down Under in July of this year. A coupe will follow in 2015.
Hyundai Australia says it is still to finalise market positioning for the 5 Series/E-Class targeted four-door – pricing and specification levels are a WIP (work in progress).
Providing context for the Korean giant’s foray into the Australian prestige marketplace, Zuchowski is realistic on Genesis’ brand standing compared to the establish luxury marques. Nonetheless, he believes the models have potential to generate both profit and brand equity for Hyundai.
“Is the Genesis brand on a par with the other premium [marques]? No, but they’ve spent decades and decades and decades to develop that equity, and ours isn’t there yet,” he stated.
“[But] What people recognise is value, and even people shopping for premium cars recognise value.
“When they look and see that they don’t have any compromises in craftsmanship or performance or ride dynamics or technology or power – no compromises at all – and [at a] significantly reduced price... those people are willing to make that switch... That’s a smart move, and we’re seeing a lot of that [in the USA].
Zuchowski says Hyundai’s market share in the US premium market is higher than its 4.6 per cent of the “general” segments.
“We’ve actually been more accepted in the premium segments – because of the value of our products – than we have in the general market overall. That’s very encouraging, and it bodes very well for future continued growth.”
He argues that even if a Hyundai badge limits what its dealers can charge for the admittedly well-equipped and finished Genesis models, the impact is positive for the whole brand.
“We never expected to sell at Mercedes Benz or Lexus or BMW [price] levels. That was never the intention... If it was, absolutely [the Hyundai badge] would be limiting.
“In terms specifically of selling premium products out of a Hyundai showroom and having premium customers in the same service drive and in the same sales process and F&I [finance and insurance] offers as other customers, that hasn’t been limiting at all. It’s surprised us – it’s been actually a wonderful overall impact on the total brand.”
Drawing on his US experience, Zuchowski is adamant Genesis has an important role to play for Hyundai in the evolution of the brand, but he remains realistic about its place in the company’s range of products.
“Premium’s very important to us, but if premium gets towards 10 per cent of our total volume, that’s a big thing... We’re still primarily a major market brand – a core model brand – and we use the premium products to elevate that...
“We have growing [new car buyer] consideration, but our growing consideration still needs to get to where Toyota and Honda are right now. By spending hundreds of millions of dollars to build a sub-brand [you’d be] taking that away from trying to build your primary brand,” he stated.
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Written byMike Sinclair
Our team of independent expert car reviewers and journalists
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