Where Is Hyundai's Genesis Brand Getting Its Buyers From? Genesis' Spiritual Predecessor
Genesis Motors is soon to complete its first year on the U.S. market.
Through the first ten months of its run as Hyundai’s luxury spin-off, 15,254 copies of the Genesis G80 and Genesis G90 have been sold. That’s 15,254 buyers who all moved over from other auto brands. There was no other way — no repeat business, no C-Class to E-Class to S-Class-style chain reaction.
More of those buyers moved over from the Hyundai brand than anywhere else. That makes sense. The Genesis G80 is essentially a second-generation Hyundai Genesis sedan. The Genesis G90 is a second-generation replacement for the Hyundai Equus. Hyundai buyers are trading in and trading up.
But when it comes to earning conquests from luxury rivals, Genesis Motors does so most often at the expense of Genesis’ forerunner, the last brand to do what Genesis wants to do.
30 percent of Genesis G80 and G90 conquests come from the Lexus brand, according to Wards Auto. That’s double the number Genesis has grabbed from BMW, the next-most-often conquested brand, and nearly triple the number of conquests Genesis has gleaned from Cadillac and Mercedes-Benz.
“We don’t think that people are going to turn the switch and suddenly forget about other brands and flock to us,” Genesis Motors general manager Erwin Raphael told Wards. But if Genesis can attract the attention of buyers, “a decent percentage of them will choose us and that will be enough for us to be very successful,” Raphael says.
Success, by Genesis’ measurement, isn’t the same as success for Lexus or Mercedes-Benz or BMW. Even if the forthcoming G70 sedan doubles the brand’s volume, Genesis will still be selling only 40,000 cars per year in the United States.
Mercedes-Benz USA sells nearly 27,000 cars and SUVs per month.
No, building a luxury brand from scratch will take time. Indeed, it will take more time than it ought to because Genesis is way behind the SUV/crossover trend. Based on this year’s New York International Auto Show GV80 concept, Genesis’ first production utility vehicle is still two years away.
For the time being, Genesis is fighting for a small slice of an increasingly small pie. Overall premium brand car sales are down 4 percent this year.
Acura, Audi, Cadillac, Infiniti, Jaguar Land Rover, Lincoln, Porsche, Volvo, and indeed Lexus all sell more SUVs/crossovers than cars. U.S. sales of premium brand SUVs/crossovers are up 6 percent in early 2017, claiming 57 percent of the overall premium market, up from 54 percent in the first five months of 2016.
Yet it is in that shrinking car sector where Genesis intends to initially make a name for itself, operating out of tailored corners of Hyundai showrooms. Perhaps too many Hyundai showrooms.
Incidentally, coinciding with Genesis Motors’ theft of sales from luxury brand rivals is a 29-percent decline in sales of Lexus passenger cars. No premium brand is losing car sales faster this year.
Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.
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lol, so they've sold 15,000 over ten months...of which the majority were sold to Hyundai buyers to begin with. Then of the minority sold to actual conquests, 30% of that number was to Lexus buyers. After all these divisions and subtractions I get the feeling that less than one person per major metro actually becomes a conquest sale each month, lol.
It's very obvious why Genesis is converting Lexus buyers. Look at the top photo of that elegant, stately executive saloon. Now look at a current Lexus. The Genesis is the modern evolution of the original LS400 in more ways than a new LS.