224,000 Google Results Later, Hyundai CEO Closes The Door On Luxury Brand

by Derek Kreindler

July 17th, 2012 2:23 PM

If it weren’t for auto bloggers, the question of a separate Hyundai luxury brand would have been dead and buried long ago. But auto bloggers, with a desperate need to generate news out of thin air, won’t let the story die. 224,000 Google results later, and we finally have a definitive answer.

An interview with Automobile Magazine quotes Hyundai CEO John Krafcik as stating

“We actually thought about launching the Genesis that way, and putting them in their own showrooms, but we’re not going to do standalone premium franchises because costs are so high. If you multiply 200 dealerships by a cost of $10-20 million per dealer to make a new space, it comes out to something like $5000 or $6000 that would have to be added to the price of the car.”

A look at the Google results shows a series of back-and-forth headlines to the effect of “Hyundai mulls establishing premium luxury brand” and then a refutation shortly after with a headline stating something like “Hyundai denies luxury brand, separate Genesis showrooms”.

The sad thing is, there’s no confusion. All along, the idea has been an unequivocal non-starter. But the gods of pageviews dictate that even the flimsiest rumor has the potential for a story, and thus the rumor, like the Protocols of the Elders of Zion, refuses to die. Hopefully now we can put it all to rest.

#Hyundai #HyundaiEquus #HyundaiGenesis #JohnKrafcik #LuxuryCar #Sedan

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Jetcal1 on Jul 17, 2012

Mr. Hoenikker, A low FICO score does not automatically make one a "deadbeat". Many of the young adults I had working for my in the Navy had low FICO scores because they came from the families that drove that beat up Sonata. Daddy wasn't there to co-sign that loan. I counseled a fair number of them into Accents because they could payoff the car before the warranty was up and because maintenance was part of the deal. Plus the store would match the credit rates of the credit union. Not everyone can afford to drive an FJ60 from the start.

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- Felix Hoenikker on Jul 18, 2012
  
  jetcal1, I came from a blue collar family. The standing rule when I was growing up was that the parents would not buy, contribute to or cosign for a car. If you wanted a car, you better get the money first and shoulder the costs afterward. Hence I did not get a car until I was 21 and senior in college. It cost a whole $400 and lasted for three years until I could save up enough for a new one. I thought this was a good policy so I carried it forward to our kids. Last Winter, I accompanied my 24 year old car shopping as an observer. He found a car he liked and they asked him for his drivers license so they could run a credit report. The salesman said he had the second highest credit soore he had ever seen for someone that age. The only credit he had before was one credit card he used for gas and misc expenses which he paid monthly and did not carry a balance. He also paid off a $13K student loan in less than two years again with the money he makes at his job. To me the biggest factor for his FICO success is that he hates to spend money. But getting back to my original comment, I did not mean any disrespect for the young people you mentioned. I was aiming at the $99 down and $99 a month crowd that the local Hynundai dealer hollers to on the radio. If I were in the market for a luxo car and I'm not because I have a healthy respect for capital, I would avoid any dealer that advertises scammy deals like that. That's all.
  
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- Jetcal1 on Jul 18, 2012
  
  @Felix Hoenikker Hello Felix, Thank you for taking the time to respond. You hit a hot button. After watching a few of my kids getting taken with 30% loans and other interesting business practices I really came to hate the used lots and their predatory practices. The FICO game is easy to play once you know the rules, not so simple for 18/19 year olds out on their own for the first few years.
  
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Don1967 on Jul 18, 2012

What many are missing from this interview is that Krafcik's dismissal of separate branding is highly conditional, and based on current market conditions. His quote even closes with the words "probably" not. In other words, never say never. Right now it doesn't make sense to make the investment, with a tough economy, insufficient brand image, etc. But in 3, 5 or 10 years, who knows? Smart business people might close the door, but they never lock it.

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Art Vandelay on Jul 18, 2012

I always figured the eventual goal was to get the "legacy" Hyundai buyer (99 down, 99 a month for the next decade) to head down to the Kia dealer and have Hyundai move more upmarket. I don't think it is unrealistic...look at the brand's image compared to 10 years ago. Did anyone see these cars comparing favorable to Toyota's then? I wish they'd build a Kia-ized Genesis though...Could help fill the hole left by the Panther's departure. Besides everyone knows the really wealthy don't drive BMW's or Lexuses...They are driven in stretched Town Cars and Caddys or if they have really made it, a LWB Bentley or Rolls.

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- Bd2 on Jul 18, 2012
  
  The whole Kia being 'downmarket' of Hyundai is a common misconception - a no. of Kia models start at a higher MSRP than the Hyundai model in the same segment (and there is no 'lux' trim for the Sonata as there is for the Optima - the Optima SXL). As for a Genesis-sized Kia, Kia does have one - the K9 (christened, the Kia Quoris for overseas markets; my, that's a horrible moniker) which is slots btwn the Genesis and Equus in size. There is no word yet if the Quoris will make its way to the states, but it seems very likely. But in the meantime, Kia will launch the refreshed Cadenza (which competes in the same segment as the Azera, Maxima, Avalon, etc.) in the US sometime next year, and Kia supposedly has greenlit the GT for production which is about the size of the Infiniti G.
  
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PV_Pathfinder on Jul 19, 2012

Talk down to entry level car buyers all you want. Whether they are just looking for basic transportation, have poor credit scores, can't afford a $40k ride or are simply buying their first car... To paraphrase Tyler Durden: "Look, the people you are bashing are the people you depend on. They cook your meals, haul your trash, connect your calls and drive your ambulances. They guard you while you sleep. Do not... mess with them."

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