Question marks over Australian Genesis strategy

HYUNDAI Motor Company Australia (HMCA) chief operating officer Scott Grant has revealed the company has been forced to change its Genesis luxury brand strategy, following confirmation from its South Korean headquarters that six products will now arrive within three years.

Speaking with GoAuto at the national media launch of the new i30 in southern New South Wales this week, Mr Grant confessed that with the rollout of Genesis as a sister brand of Hyundai, “Sixty or 90 days ago our plan was quite different”.

“If you’d asked me 60 days ago I would have given you a very clear picture, but some things have changed in the last couple of months on Genesis,” he continued.

“Sixty, 80 or 90 days ago I would have said, look, we’ve got 25 dealers who represent Genesis right now, we’ve got one product, we’ve got another product coming at the end of the year, I would have said that’s our firm plan.

“Two products, 25 dealers, away you go. Now it is bigger than that, it has the potential to be much bigger than that into the future.”

In the middle of the year the current Hyundai Genesis upper-large luxury sedan will flick its ‘H’ badging – already deleted for some hire-car buyers – and, timed with a light facelift, will be renamed the Genesis G80.

Late this year it will be joined by the BMW 3 Series-rivalling Genesis G70 sedan, using the same rear-wheel-drive platform and a 3.3-litre twin-turbocharged V6 engine as used in the Kia Stinger GT.

Now, however, with another four to five products set to follow including at least two large and upper-large SUV models, Genesis could potentially become too large to integrate within standard Hyundai dealerships.

“There’s six or seven products that are now committed and underway for Genesis, so they will move away from the Hyundai brand and that’s a big decision to make,” Mr Grant continued.

“With that came a rollout plan market by market to bring that to the world, and this has all happened in the last six months. For us it has been the last 60 days. It’s been difficult for us sitting over here exactly what that means for us.

“In terms of what products, when, what does the luxury branding mean in terms of sales distribution channels, marketing and so on … lots of those questions HMC has been unable to answer. All of the headspace of HMC has been focused on the success and development of that (global) strategy.”

Mr Grant confessed that “everything is up in the air” for Genesis at the moment and it is “taking longer than we thought to finalise.” However, Hyundai dealerships had been informed of the change and, “By the end of June or early July we’ll probably have reached implementation consensus with HMC.”“We had a meeting with our dealers in August or September last year where we talked about the vision at that time for where Genesis was at and where it was heading,” Mr Grant continued.

“At that time, we said what that means exactly and precisely for Australia we don’t know, but we’re planning, we’re discussing, and as soon as we have some information we’ll come back and share it. For the time being, have some confidence about the future and where it’s heading, keep doing what you’re doing and representing the product to the best of your ability.”

Mr Grant said that a decision had not been made whether the brand would utilise stand-alone dealers or larger combined dealerships such as Toyota/Lexus. Being a former Toyota/Lexus executive, he said he would draw upon his experience with Lexus’ customer service reputation.

“The biggest thing by far is customer service and support around the product,” Mr Grant continued.

“We’re looking at … all that goes with that, which are things like a luxury experience, the right level of customer engagement, the right kind of marketing strategy of Genesis now as a sub-brand as opposed to Hyundai, and what are the expectations of us and our dealers in that regard.”

For the two products launching this year, Mr Grant confirmed that the G80 would continue with a luxury focus, while the G70 would be a sportier offering – and that could mean similar pricing for the duo, although there was no final decision yet.

“Obviously it (G70) is smaller inside but it … will be quite different from the G80,” he explained.

“It’s quite a large car, it’s beautifully finished, but it’s not necessarily a sporting drive where I think the G70 will have a more performance orientation.

“So to what extent will they sit side by side? How far is it this way or is it a Y-strategy and equal in pricing? I think there will be different buyers and a different experience completely.”

Mr Grant said the launch of the Hyundai Genesis had been a success, despite the fact only 373 units of the model were sold last year, down 30 per cent from 540 in 2015. He also argued that while sales numbers were not an indicator of success, the Genesis nearly doubled sales of the Lexus GS (198 units) last year.

“To bring in a luxury car and sell it under a Hyundai badge and sell anything is a success,” he said.

“I’m not looking at the sales numbers (although) we’re running head to head with Lexus GS, for example, (and) they’ve been at it for 15 or 20 years.”

A key consideration to the marketing and positioning of the G70, G80 and future Genesis products would therefore also look at how other luxury brands have fared in the highly competitive Australian new-car market.

“There is a lot of study going on our side that we’re providing as part of the discussions with HMC,” Mr Grant added.

“What are the other luxury brands doing in Australia? How are they structured, how are they organised? How do they do what they do and ultimately is that working or not working and is there an opportunity to either follow that plan or path or do something different?“We’ve put some ideas to HMC and they’ve come to us with some plans and we’re in the process now of understanding exactly what it means in terms of a launch plan for our market.”