By on May 2, 2018

2018 Genesis G70 lineup - Image: Genesis

Ever since Hyundai launched Genesis as a separate luxury brand, there’s been plenty of confusion as to how to distribute its vehicles. The company initially said Genesis would have an entirely separate U.S. dealer network within three years. Then it said existing Hyundai retailers could continue to sell luxury models if they met a certain criteria, but noted many would become ineligible as standalone stores became the norm.

Now Genesis is saying all Hyundai dealers are in the running, but they’ll need to have separate facilities for the luxury brand if they want to sell them. While the change isn’t drastic, it’s the third time the brand’s parent company has revised its dealer strategy, leaving us confused as to what the automaker’s plan was all along. 

Originally, the idea was to shift product to 100 stores in 48 markets, with an emphasis on urban markets seen as being more willing to purchase such vehicles. “The reality is, many, many luxury customers tell us they love our products, they’re amazing, but I’m not going into a Hyundai store to buy it,” explained Genesis Motor America boss Erwin Raphael last October. “It’s really hard to have the two cultures cohabitating.”

In 2018, Hyundai Motor America announced that only 350 existing franchises would be eligible for the new stores. However, they could take a buyout if they didn’t want to sell the cars. But plenty of them did, throwing a modestly sized wrench into the 100-store strategy.

This week, Automotive News reported that this resulted in the company tweaking its strategy to make every single dealership in North America suddenly eligible. That opens the network up to more markets and the possibility of additional stores. However, Genesis also said 2019 models will only be wholesaled to newly franchised Genesis retailers — meaning those that received approval with separate facilities for the luxury brand.

So which is it — the scalpel or the sledgehammer? Does Genesis Motors want fewer stores in carefully selected markets or widespread distribution across the country? It sounds like a little bit of both. The manufacturer still wants dealerships to take the steps necessary to separate Genesis vehicles from the rest of the lot, but it doesn’t seem as interested in pruning the number of locations where that takes place.

[Image: Genesis Motors]

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28 Comments on “What the Hell Is Happening With Genesis’ Dealer Network Strategy?...”


  • avatar
    civicjohn

    Management is still putting the finishing touches on font styles for the “No Credit, No Problem!” signage.

  • avatar
    eggsalad

    Nobody wants to drop $70k at a BHPH lot.

  • avatar
    Hank

    According to Hyundai’s training docs, the median household income for a Genesis customer is 132,000. Even more pertinent to the negative comments about Hyundai lots, the median Elantra buyer income is still $63,000 and is more likely than not to be a college graduate. Outdated attitudes about the brand persist in the TTAG comment section more than on the lots.

    • 0 avatar
      civicjohn

      Hank,

      I guess we know what you drive, or maybe what you sell, and I’m fine with it. But you can only put lipstick on a pig so often.

      Stats are stats, they can be folded and framed to suit everyone. But if you think Team Genesis has purged this behavior out of the dealership network, I guess you don’t get out much or ever watch local news TV.

    • 0 avatar
      ajla

      The customers are perfectly fine but the last time I drove a Genesis sedan at a dealer (2015), there were balloons taped to it and they were doing some cheesy “Wheel of Saving” thing in the showroom.

      I like H/K’s products but their dealers need to move out of the late 90s mindset.

    • 0 avatar
      MLS

      Product desirability and dealership experience are two very different things. See also: Mazda. Just because educated, relatively high income buyers see value in Hyundai products does not mean that the dealership experience is any good.

      • 0 avatar
        arach

        I didn’t know how bad dealerships could be since I bought my hyundai.

        see before the Hyundai, I owned Caddy, BMW, and Porsche. I owned Ford, and even Chevy.

        I LOVE my hyundai, but have had awful after awful experience at the dealerships. In fact my experiences were so bad I switched to a different dealership to service my car. Then after still having bad experiences, I’m about to go to my neighborhood carX for an improved service experience.

        I like the Genesis brand, but I don’t know if I’d trust a “hyundai dealership” to either give me sales OR service that isn’t the worst in the industry.

    • 0 avatar
      Bazza

      With people my age (50+), Hyundai suffers from collective memories of their very humble entry into the U.S. market. Fortunately, some of us are observant enough to clearly differentiate “then” vs “now”. Kia, on the other hand, seems to be saddled with the same dealer issues that plagued them when they sold sh*tbox Rios. That makes selling nicer cars like the Stinger and K900 a high hurdle indeed.

      Anecdotally (my own personal poll), Genesis owners seem very pleased with their purchases…pleased enough that I’m going to take a good hard look at the G80 Sport as my next interstate cruiser.

    • 0 avatar
      bd2

      This is a stop-gap measure meant to appease the dealerships; the dealerships that are awarded a Genesis franchise will be required to invest in new/separate facilities for Genesis.

      The problem with this new measure is that instead of Hyundai getting to pick and choose among the best dealerships/dealer groups – any Hyundai dealership willing to pony up the $$ for Genesis will get to do so.

  • avatar
    MLS

    “It’s really hard to have the two cultures cohabitating.”

    That’s a hilariously delicate way of phrasing it.

  • avatar
    Dilrod

    I can totally relate. I love Chuck E. Cheese pizza, they’re amazing, but I won’t go into one of their restaurants to buy it.

  • avatar
    dwford

    Meanwhile, the current confusion is having the G80 sold at pretty much all Hyundai stores, but the G90 only sold at certain Hyundai stores.

  • avatar
    dukeisduke

    That’s what the Genesis dealers would like to know.

  • avatar
    bd2

    The problem was that the “strategy”/plan put together by Raphael and Fitzgerald was totally unfeasible.

    The plan was for ’19MY Genesis models (including the new G70) to be only available/sold at the 100 or so planned new Genesis dealerships.

    The problem was that they hadn’t even finished determining who would get the Genesis dealerships, much less starting to build them.

    Which was why there was the rumor of delaying the G70 launch in the US until the fall when presumably some Genesis dealerships would be up and running, but hardly anywhere close to the planned 100 – which, itself, was too few (leaving many states, like South Carolina, w/o a Genesis dealership).

    While the initial plan was poorly thought out and the timetable was total unfeasible, this total about face is also silly.

    Should have limited sales to the 350 dealerships which had invested in carrying the G90 with the understanding that any continuation would be contingent on building out a new, separate dealership (for the larger markets) or a separate building/facility for dealerships located in smaller markets.

  • avatar
    Felix Hoenikker

    The timing of this post is perfect. Today, I called my local Honda dealer to confirm my appoint for a state inspection and an oil change. The automated answering system wanted to know which dealership I needed for service – Honda, Hyundai or Genesis. They have two buildings one for Honda and one for Hyundai – no Genesis signage. So I guess they are selling both Hyundai and Genesis out of the same building. Also, they have no room at that site to put in a separate building for Genesis. I would guess there is not enough volume to support a separate facility unless the company is going to heavily subsidize it. In any case I don’t imagine that I would frequent the Hyundai dealer for a Genesis unless they had at least a separate entrance and a fence between the two brands. This is more to separate the sleazy salespeople than the customers.

  • avatar
    healthy skeptic

    Has Genesis thought about direct sales? Is it too late to go down that road?

    • 0 avatar
      bd2

      Genesis Canada does that and while it allows for great service (drop off delivery via trailer at home/office (for purchase, along with and valet test drives), such a sales/distribution model will need time to gain traction.

      Ever since Genesis Canada adopted this sales/distribution model, G80 sales have declined by multiples.

  • avatar
    John Horner

    Maybe Hyundai can get creative by teaming up with NA Honda and make all Acura dealers Acura-Genesis dealers. There is currently no product overlap between those two brands.

  • avatar
    EAM3

    Here’s my problem with the Genesis. The car? None, dollar for dollar you can’t beat it. My dad loved every second of owning the car. The dealer network? Where do we begin? From my father’s experience with his Genesis, the car really should be sold from an entirely separate dealership. The general attitude at Hyundai dealers (at least in south Florida) is straight from the 1980s playbook. From sales tricks to sell useless add-ons to the service department where they try to sell you a fuel injection service for nearly $300 on a car with 15K miles.


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