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America Has Too Many Genesis Dealers, Canada Has None: Here’s Why

2018 Genesis G90 – Image: Genesis Motors

There are 350 Hyundai dealers in the United States currently offering vehicles from the automaker’s new Genesis Motors brand inside Hyundai showrooms. It’s a model Genesis wants to change — simply too many stores for a fledgling auto brand; too much affiliation with proletarian Hyundai.

It’s also entirely unlike the non-dealer model Genesis Motors began employing in Canada on Monday, November 21, 2016. Genesis began business operations 48 hours ago with no physical locations whatsoever.

Dealers? Pfft. Someday.

Not today.

In conversation with Hyundai Canada’s Chad Heard yesterday, we learned more about the unique plan for Genesis in Canada. Eventually, there will be dealers, ideally 30 across the country after an initial ramp-up of roughly 17 in major urban centers. But the Genesis outlets that will gradually begin to appear later in 2017 won’t be tucked away in the corners of a Hyundai showroom.

“Our preference will be for a physically stand-alone facility,” Heard told TTAC.

2017 Genesis G80 winter mountains - Image: Genesis Motors

In the meantime, there are a couple of avenues through which potential Genesis customers will become Genesis owners. First, Genesis Experience Managers will follow leads — including via an online process in which customers can complete much of a transaction — that result in vehicle demonstrations for customers at their homes or offices.

The Genesis Experience Managers are employees of Hyundai Canada’s distributors, but will be selling Genesis Motors’ stock.

“Genesis Motors Canada owns the inventory,” Heard says.

But Genesis Motors will also install temporary “boutique retail locations” in shopping centers in Vancouver, Toronto, Montreal, and potentially Quebec City. These are the same markets to which GEMs will be limited during the launch phase, as well. Looking for a G80 in Flin Flon or Fogo Island? You’ll have to wait.

Undeniably, this is no recipe for major sales volume for a brand that, apart from the unusual non-dealer model, is an upstart with essentially no history. If in fact Genesis Motors is building on that which Hyundai built, there’s little foundation. Hyundai Canada has sold fewer than 10,000 Genesis sedans during the period in which the now-G80 operated as the Hyundai Genesis. There were fewer than 500 copies of the Equus sold all-time. The Equus becomes the Genesis G90 in second-gen form.

But Hyundai Canada is prepared for an exceptionally low-volume launch with Genesis.

“Our focus is not on volume,” Chad Heard tells TTAC. “Our focus is on customer experience.”

2018 Genesis G90 - Image: Genesis G90

Thus, built in to the launch of the Genesis G80 and Genesis G90 is a new pricing model (all fees are included), scheduled maintenance and navigation software updates are included for five years or 100,000 kilometres. An owner will not bring their G80 or G90 to a dealer for service — it will be replaced with a courtesy vehicle and returned after maintenance is completed. Every G80 and G90 will also include all-wheel drive.

Pricing for the G80 3.8 Luxury starts (and ends) at $54,000. The G80 3.8 Technology is a $58,000 car. One G80 V8 trim, the 5.0 Ultimate, costs $65,000. G90 prices are either $84,000 (for the 3.3T) or $87,000 for the 5.0-liter V8.

Product, always thought to be key, is surely as important for Genesis as it is for Mercedes-Benz. But this shakeup of the conventional norm in the dealer sphere will be a real challenge for Genesis Motors Canada. Entering a battle where Mercedes-Benz, BMW, and Audi — Canada’s three highest-volume premium brands — own more than half the premium market, Genesis must make a way for itself without any traditional outlets and no SUVs to speak of at launch.

Heard insists Hyundai is in this for the long haul, and there’s no expectation for instantaneous success. After all, how can there be?

But if Genesis can succeed over the next 5 to 10 to 15 years with a much broader lineup, it wouldn’t be the first time a Korean automaker tipped over the apple cart.

Hyundai Canada doubled its share of the market between 2004 and 2014. Hyundai and Kia together now own 11 percent of the Canadian market, well in excess of the duo’s 8 percent share in the United States.

Regardless of Hyundai’s Canadian success, the automaker knows the new Genesis brand must be far removed from its current stable of products.

“Genesis will bring the brand into customers’ lives in a harmonious way,” says Genesis Canada’s director, Michael Ricciuto.

In other words, take the cars to the people, don’t bring the people to the cars if the cars are parked beside Accents and Elantras.

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.

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