Genesis Hits the Partial Reset Button As It Awaits 2019 Models

Steph Willems
by Steph Willems
genesis hits the partial reset button as it awaits 2019 models

We told you yesterday of the hurdles facing the fledgling Genesis brand, a standalone luxury marque launched two years ago under the umbrella of Hyundai Motor Group. Currently, just two models reside in the Genesis stable — the midsize G80 and full-size G90, with the 3 Series-fighting G70 bowing later this year.

It’s been a slow, measured start for the brand, but a shifting strategy for its U.S. dealer network means these early days haven’t been easy ones. A Genesis spokesman tells us that the brand’s inventory is being whittled down ahead of the launch of the revamped network alongside fresh, 2019 model year vehicles. Just how many Genesis dealers will exist at that time is unknown.

While the network remains a work in progress, Genesis seems confident that its most recent strategy will ease dealer unrest.

At the beginning of the year, the automaker announced compensation packages for some of the 350 elite-level Hyundai dealers that invested in training and building a dedicated showroom space for Genesis products. The new brand wanted a carefully placed network of 100 standalone dealers to separate the two brands and avoid confusion. After all, Genesis was once a Hyundai model.

In the spring, the game changed again. Instead of members of the previous elite-level group applying to become one of 100 standalone dealers in 48 specific markets, Genesis opened the opportunity up to all Hyundai dealers. It still plans to reduce the number of Genesis stores to improve throughput and profitability, but the numbers are no longer set in stone.

“As [Genesis Motor America] receives its state distributor licenses, state by state, we then reach out to all current [Hyundai] dealers in those states and give them a choice to make: accept a lucrative and very fair Separation Offer to forego the ability to sell Genesis vehicles OR raise their hand and tell us they’d like to sign a new Genesis Dealer Sales & Service Agreement and become a new [Genesis] Dealer,” explained Kevin Smith, the brand’s senior group manager of PR.

“Because this is an ongoing process and we’re giving them the choice, there’s no way at this point to know the total number of dealers we’ll ultimately have late 2018 or early 2019.”

Smith estimates that half of Hyundai’s dealers will likely choose to become Genesis dealers. As for those standalone stores, that’s another work in progress.

“For the next 1-3 years, dependent upon market-by-market situations, Genesis will reside in [Hyundai] stores with visible branding separation,” Smith said. “Standalone facilities will come over time.”

Concurrent with the dealer strategy, Genesis began closing the taps on G80 and G90 production in order to sell down its vehicle stock ahead of the revamped dealer launch. The brand wants “the new network to start with MY19 product and as few MY18 as possible,” Smith explained. As it stands, Genesis Motor America has no stock waiting in port and about a month’s worth of inventory. This is reflected in the automaker’s declining U.S. sales numbers.

“Knowing we wouldn’t have a beginning new network of G dealers with MY19 G90, G80 and G70 inventory until third quarter 2018, we decided to hold the majority of our marketing budget for use in the final four months of the year,” Smith added. Once a “critical mass” of new Genesis dealers exist, and with sufficient amounts of 2019 product, the brand plans to ramp up production and offer “reasonable incentives.”

The 2019 G70, currently entertaining journalists at a first-drive event, is the brand’s last sedan for the foreseeable future. After that, three crossovers wait in the wings — essential product for any automaker.

[Images: Genesis]

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  • Bimmer Bimmer on Jul 12, 2018

    Did I miss that memo? Because I've seen G70 driven around Ontario highway last week.

  • Jim Trainor Jim Trainor on Jul 13, 2018

    Clearly, Art, you DON'T remember the launch. Your ridiculous comment..."everyone marveled at how bad the cars were"... is dead wrong. Go back and check the reviews. Oh, btw, the original Genesis was picked as the North American Car of the Year in its first year out of the box. Say what you want about that award, but I'm quite sure it's NOT decided by how bad a car is.

  • Dave M. Although the effective takeover by Daimler is pooped upon, this is one they got right. I wasn't a fan of the LHs, mostly due to reported mechanical, NVH and build quality issues, but I though Chrysler hit it out of the park with the LXs. The other hyped release that year was the Ford Five Hundred, which, while a well-built car with superior interior space, couldn't hold a candle to the 300.
  • Art Vandelay I always liked those last FWD 300's. Been ages since I've seen one on the road though. Lots of time in the RWD ones as rentals. No complaints whatsoever.
  • Cardave5150 I've had 2 different 300's - an '08 300SRT and an '18 300C. Loved them both a LOT, although, by the time I had the second one, I wasn't altogether thrilled with the image of 300's out on the street, as projected by the 3rd or 4th buyers of the cars.I always thought that the car looked a little stubby behind the rear wheels - something that an extra 3-4" in the trunk area would have greatly helped.When the 300 was first launched, there were invitation-only meet-and-greets at the dealerships, reminding me of the old days when new model-year launches were HUGE. At my local dealer, they were all in formalwear (tuxes and elegant dresses) with a nice spread of food. They gave out crystal medallions of the 300 in a sweet little velvet box (I've got mine around the house somewhere). I talked to a sales guy for about 5 minutes before I asked if we could take one of the cars out (a 300C with the 5.7 Hemi). He acted like he'd been waiting all evening for someone to ask that - we jumped in the car and went out - that thing, for the time, seemed to fly.Corey - when it comes time for it, don't forget to mention the slightly-stretched wheelbase 300 (I think it was the 300L??). I've never found one for sale (not that I've looked THAT hard), as they only built them for a couple of years.
  • Jkross22 "I’m doing more for the planet by continuing to drive my vehicle than buying a new one for strictly frivolous reasons."It's not possible to repeat this too much.
  • Jeff S Got to give credit to Chrysler for putting the 300 as a rear wheel drive back on the market. This will be a future classic.