Hyundai, not dealers, to prop-up Genesis brand

Hyundai will launch its standalone Genesis luxury brand in Australia via two wholly-owned dealerships in Sydney and Melbourne from around October this year.

Initially, the factory-owned Genesis dealerships will exclusively sell only the all-new G70 mid-size sedan, with the larger G80 sedan — a rebadged and upgraded version of the Hyundai Genesis that found just over 1000 buyers here between 2015 and 2017 – now delayed until the first half of next year.

Confirmation of Hyundai’s Australian launch strategy for the Genesis brand — Hyundai’s answer to Toyota’s Lexus and Nissan’s Infiniti – follows months of delays.

Speaking to motoring.com.au at the launch of the new Hyundai Santa Fe this week, Hyundai Motor Company Australia chief executive JW Lee said the company-owned dealerships would relieve Hyundai dealers of expensive start-up costs… for the time being.

Lee said dealers were reluctant to front-up the capital required for new outlets to sell only the Genesis G70 and G80, preferring to wait until a range upcoming Genesis luxury SUV models were available.

He added that the untested nature of the new premium brand locally, as well as the failure of brands like Infiniti to capture the Australian public’s interest, had dissuaded dealers to invest in the brand even as part of existing dealerships.

“We will establish the brand separately in Australia, but that obviously means providing a national dealership network,” Lee explained.

“Our dealers have told us that two sedan models – the G70 and the G80 – are not enough [reason] to make the investment required to support a new brand. It would cost quite a lot.

“So we decided that a company-owned showroom in two high-profile locations would take the burden off our dealers, but at the same time introduce the Genesis brand [to the local market].”

Australia’s first dedicated Genesis outlets – believed to be the first of their kind globally – will likely be followed by similar high-profile Genesis retailers in Brisbane and other state capitals.

Lee hinted said that Sydney and Melbourne were obvious starting points for the Genesis brand’s local introduction, but said other metropolitan markets will follow.

He said the G70 — a direct rival for the Mercedes-Benz C-Class and BMW 3 Series — will arrive “by the end of the year” and with a sub-$60,000 entry price, followed by the BMW 5 Series-rivalling G80 by “early to mid-2019”.

“When we have the SUV, then we can reconsider the support of our established dealers,” Lee continued, referring to the upcoming seven-seat GV80 and five-seat GV70 SUVs he indicated would arrive in 2020.

The Genesis brand is also expected to be joined by an all-electric sports car by early in the next decade.

“The point is that it’s unreasonable for dealers to make huge investments in separate showrooms when there are only two models [available to us],” added HMCA public relations general manager, Bill Thomas.

“I believe JW [Lee] mentioned that to our dealer council recently – that the way that it will likely go initially will be that we will do our own thing.

“I think that with just the two models it is a challenge, and it is a challenge to separate it [the Genesis brand] completely and have a bespoke set-up given the investment levels required.

“The plans are still under wraps [but] effectively, in the initial stage, the dealers won’t be involved,” he concluded.

More detail of Hyundai Australia’s standalone Genesis dealerships and sales model are expected to be announced in the coming months.