Hyundai’s luxury division, Genesis, has encountered some bumps in the road. Established as a luxury brand in 2015, Genesis produces highly competitive luxury vehicles at appealing prices. However, the transition from being a part of Hyundai to an independent brand has not been seamless. While the cars themselves are well-received by customers, there appears to be some turbulence behind the scenes.
At a recent dealer council conference in Dallas, tensions came to a head. Attendees representing dealerships offering both Hyundai and Genesis brands were so dissatisfied with senior executives that they walked out of a meeting regarding the operational structure of the Genesis retail network.
The source of frustration stems from the initial agreement when Genesis was transitioning into a standalone brand. Hyundai dealers were initially permitted to continue selling Genesis luxury vehicles at their existing dealerships, as long as they allocated a dedicated area for Genesis cars. However, Hyundai has now decided to accelerate the separation of Genesis from its parent brand, a move driven by the desire to avoid mixing high-end G80 and G90 sedans with more affordable Hyundai models like the Accent or Elantra. Despite the quality of these compact vehicles, the coexistence is deemed detrimental to Genesis’ reputation as a luxury brand.
Consequently, the revised strategy aims to enhance the exclusivity of the Genesis brand by restricting distribution to a selective network of 100 dealerships in key markets, equipped with unique showrooms exclusively for showcasing Genesis luxury vehicles. This adjustment has left dealers who heavily invested in carrying the Genesis brand feeling frustrated, as Genesis has appealed to a broader demographic of car buyers compared to Hyundai alone.
Hyundai emphasized, as reported by Automotive News, that “the company’s intention has always been for Genesis vehicles to be exclusively sold through a distinct Genesis dealer network that is profitable for dealers and will deliver the luxury experience expected by Genesis buyers. Both the company and the dealers are in alignment that this is crucial for the success of the Genesis brand and its dealer network.”
It appears that walkouts at dealer conferences are now considered an indicator of “complete agreement.”
