Launching a luxury car brand

Steve’s breakdown: Genesis is set to have its own dealerships and that, my friends, is the birth of a new auto ad account. Not sure who will be doing the work but we do know the budget will be around $20 million.

FOUNTAIN VALLEY, CA: Genesis is to working hard to distinguish itself as the luxury arm of automaker Hyundai. Initially, it was conceived as a top-tier luxury model under the Hyundai name, but now it’s spun off to become a sub-brand. Genesis is looking to further distance itself from the Hyundai equation, and to do that it seems it will be getting separate dealerships of its own.

According to Automotive News, Genesis is accelerating forward plans to separate from the Hyundai dealership network. The brand, which began selling cars in August of 2016, can currently be sold in any of the 835 Hyundai dealers. That goes only for the G80 model, though, which used to be called the Hyundai Genesis. The G90, formerly the Hyundai Equus, is offered in 352 dealers, and each needs a showroom within a showroom.

The new plan moves forward by one to two years original plans to begin separating from the Hyundai network. It appears, however, that Genesis wants a clean separation, and those showroom-within-a-showroom facilities will no longer be welcome. Additionally, Genesis is making it so that only full-franchise stores will be able to do warranty work on the cars. That’s a sore point for Hyundai dealers that had hoped to add Genesis repair business to their bottom line.

Genesis has retained legal counsel to extricate itself from deals made with dealers.

All Hyundai dealers will be eligible to apply for a Genesis franchise, but it’s unclear how many dealers Genesis wants. That number is likely lower than the 352 that currently sell the G90.

It seems that shoppers don’t particularly like the idea of buying their new luxury sedan in the same showroom as Hyundai products. On the surface it smacks of badge snobbery, but this isn’t something solely experienced by Hyundai and Genesis. No Lexus buyer would walk into a Toyota dealership just as no Audi shopper would enjoy going to a Volkswagen showroom.

If they’re buying a luxury product, they want to have a luxury experience and that’s what a stand-alone Genesis store would provide.


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