Genesis Options

[Otto73]

Hyundai Motor launches luxury car brand
Associated Press By YOUKYUNG LEE
11 hours ago

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Hyundai Motor Co. Vice Chairman Chung Euisun speaks during a press conference in Seoul, South Korea, Wednesday, Nov. 4, 2015. The company said Wednesday it has launched a premium car brand named after its Genesis sedan to boost earnings and its share of the fast-growing global market for luxury vehicles.(AP Photo/Ahn Young-joon)
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SEOUL, South Korea (AP) — Hyundai Motor Co. said Wednesday it has launched a premium car brand named after its Genesis sedan to boost earnings and its share of the fast-growing global market for luxury vehicles.
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South Korea's largest automaker said that the Genesis brand begins with two sedans, including the namesake upscale car launched two years ago and a large flagship sedan slated for release next month.

It will add four more models including a sports coupe and sports utility vehicles by 2020.

The company began preparing for the brand in 2004. Hyundai had planned to launch it when it released the first Genesis sedan in 2008 but postponed because the global financial crisis dented sales of luxury cars.

Hyundai was the only major automaker without a separate luxury brand.

The announcement is a "new start" for Hyundai, said Chung Euisun, a vice chairman and grandson of the company's founder.

Even though luxury cars account for just 10 percent of global auto sales, they set technology and design trends for the overall automobile industry and their sales growth has outpaced mainstream cars.

Hyundai hired Luc Donckerwolke, former chief designer at Bentley who also previously worked at Lamborghini and Audi, to work on Genesis models as well as Hyundai cars starting early next year.

The move comes after Hyundai's latest quarterly profit slid to the lowest in five years.

Its sales in China dropped sharply this year, like other foreign auto brands in China, due to heightened competition from Chinese carmakers. The automaker's underestimation of strong demand for SUVs and a cheap Japanese yen that boosted rivals Toyota and Honda also contributed to its weak performance.

In South Korea, the company faced competition from German and Japanese cars.

[Otto73]

Hyundai Has to Be Smart About How It Creates a Luxury Brand

Hyundai is saying all the right things so far about how it's going to start Genesis. But will it succeed?
By Collin Woodard
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​Earlier this week, Hyundai announced a move to spin off the Genesis name and create a separate luxury sub-brand. Using a new naming system where each model begins with a "G" and is given a number to signal its place in the lineup, Hyundai plans to launch six new Genesis models by 2020.

To give its Genesis brand a distinct identity, former Design Director of Volkswagen Luc Donckerwolke​ has been brought in to head up a separate design division. It also won't be a brand for Europe, with initial focus on Korea, China, North America, and the Middle East. It's like Hyundai learned a lesson from Lexus's abysmal effort in Europe when it started.

So far, so good.

The announcement has been met with more than a few questions and quite a bit of speculation. People want to know why Hyundai made the decision to break Genesis off into its own brand now when previously the company had abandoned the idea. "Long story short, the success of Genesis as a brand has changed their outlook on this," says Alex Nunez, a Hyundai public relations representative. "The big thing is that Genesis became the third best selling car in its class behind the Mercedes-Benz E-Class and the BMW 5-Series." Still, with brands like Cadillac, Infiniti, and Jaguar struggling to find sales, you have to wonder if room exists for a standalone Genesis brand.
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That doesn't mean Genesis is destined to fail before it even gets started. As long as Hyundai continues to play it smart, launching a Genesis sub-brand is a great idea. At least now it won't exist in some confusing brand limbo.

Some of the harshest criticism of Genesis has been directed at Hyundai's decision to use an alpha-numeric naming structure on its new models.

The general argument there is that alpha-numerics are confusing and make it difficult to differentiate which car is which. The easy comparison is to Infiniti now that it's moved to a similar, difficult-to-keep-track-of naming scheme. More directly, the Kia K900, Kia's version of the Equus that's sold barely more than 2,000 units this year.

Problems at Infiniti and Kia are much more complicated than just the use of alpha-numeric names on the backs of cars. In the case of the K900, it sounds a bit too much like something a short-lived sci-fi show might name a robotic dog. Even calling it something else meaningless like the Z90 would have probably played better with the American public.

Hyundai

On established luxury vehicles, the confusing nature of alpha-numeric names can be a benefit. People usually don't consider themselves GLK350 owners, for example. Instead, they're much more likely to consider themselves Mercedes SUV owners. The problem comes when the brand doesn't have enough prestige to stand on its own as something people would spend luxury car money on like in the case of Kia.

If Hyundai is creating a separate Genesis brand, it will take a while to establish it as a true luxury brand in the minds of the American public, but if people end up focusing more on the brand as a whole than on the individual vehicles, it's unlikely to hurt Genesis' reputation.

The biggest hole in the anti-G-nomenclature argument, though, has to be the success of Lexus as a luxury brand. It started and stuck with alpha-numerics, and it's been quite successful in spite of them. That has something to do with the fact that Lexus builds quality vehicles people enjoy owning.

Even if you don't get caught up on the naming scheme, there's still the question of whether or not the luxury car market has room for a new brand to break in. Hyundai will have to be careful how it positions the first several models, but assuming it follows the same philosophy that it followed with the current Genesis sedan, they'll find success.

There are more than a few luxury and near-luxury brands today that are having a hard time differentiating themselves from each other, but there isn't one that's clearly targeting buyers who want luxury car features and luxury car material quality without the full luxury car price tag.

Hyundai

Hyundai is the only brand that's really doing that. And it's doing it with the Genesis.​

Genesis has the opportunity to establish itself as the luxury brand that provides the most value for your dollar. With so many brands chasing performance, there's also room to focus more on comfort and luxury than horsepower figures and track times. Not everybody wants to roast tires on a regular basis, and those people deserve cars too.​

That doesn't mean there won't be challenges that come with launching Genesis. Building a brand identity from the ground up is going to take time and quite a lot of money. It probably saved Hyundai a few billion dollars when it made the decision to keep the Genesis name in-house for the first several years, but launching a new brand is still going to be expensive.

There's also the challenge of making sure the dealer experience is up to the expectations of a luxury car buyer. Sectioning off part of current Hyundai dealerships probably won't be enough to accomplish that, though. Selling six distinct Genesis models is going to require a separate sales staff and likely separate dealerships.

Considering the demands that come with developing a full line of new cars, launching a new brand, establishing that brand's identity, supporting dealers as they're forced to build new dealerships and train new staff, and all the money it's going to take to make that happen, Hyundai is not in an enviable position here. At the same time, as long as the company is smart about it, there's a lot of potential for Genesis to become a successful luxury brand.

It might be a while before Genesis starts stealing sales away from BMW, Mercedes, and Audi in significant numbers, but if Hyundai does this right, brands like Acura, Cadillac, and even Lexus need to be be worried.