What the Hell Is Happening With Genesis' Dealer Network Strategy?

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • John Horner John Horner on May 03, 2018

    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.

  • EAM3 EAM3 on May 03, 2018

    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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