Hyundai's Genesis Luxury Brand to Target 'Savvy, Affluent Progressives'

The new Genesis nameplate -- analogous to Toyota’s Lexus division or Nissan’s Infiniti -- will target younger, upscale buyers who are “savvy, affluent progressives, who are reasonable, progressive and young” said Euisun Chung, Hyundai Motor Co. vice chairman.

“We have created this new Genesis brand with a complete focus on our customers who want smart ownership experiences that save time and effort, with practical innovations that enhance satisfaction,” Chung said in an announcement from Seoul that was streamed to the media at Hyundai's U.S. headquarters in Fountain Valley, Calif.

The new subbrand will be made up of just two models initially: the current Genesis sedan and an all-new full-size Equus set to debut next spring. Those models will be renamed the G80 and G90, respectively, for the 2017 model year.

The brand starts global sales with the G90 in South Korea next month, a spokeswoman said. That car, a successor the Equus, will be called the EQ900 in Korea. 

A third sedan called the G70 follows a year later, and by 2021 Genesis will have a total of six dedicated, rear-wheel-drive models including a midsize crossover and an SUV.

Hyundai spokeswoman Angela Hwang said the Genesis brand would be sold through its own separate sales channel in the mid-  to long-term. But that in the near term, it would have to piggyback on Hyundai’s existing showrooms.

She declined to say how much investment Hyundai was earmarking for the global rollout of the new brand.

The Hyundai line will lose the Equus and Genesis, and there are no immediate plans to replace those nameplates with other entries in their segments, Hwang said. The current Genesis Coupe, a performance-oriented rear-wheel-drive model, will not be carried into the Genesis subbrand.

Rear-wheel benefits

Using a rear-wheel-drive platform allows for significant design elements that are crucial to luxury vehicles, Peter Schreyer, Hyundai’s head of design, said at the press conference.

“It allows a very special, premium-style proportions; long hood, pretty short front overhang, and the greenhouse pushed far back,” Schreyer said. “It will strive to be a lighthouse of the industry.”

Genesis will have its own r&d division and design studio, the latter of which will be chaired by Luc Donckerwolke, a former Volkswagen Group designer.

Hyundai is still working on what this will mean for its 400 dealerships across the U.S that currently sell the Equus. That car’s successor, the new G90, will be sold in the same “showroom within a showroom” that the Equus was sold inside Hyundai stores, Mike O’Brien, vice president of corporate and product planning, said Tuesday night.

Hyundai dealerships that currently sell the Equus have a special covenant in the franchise agreement in which they pledge to provide an extra level of customer service and support, O’Brien said.

He also hinted that the Genesis sales experience would pick up on practices Hyundai had put in place with the Equus, including at-home test drives for potential customers and valet pick up and drop off of cars for service.

“When you think about the old way, it was all focused on brick and mortar and nice mahogany wood and nice granite floors,” O’Brien said. “Moving forward it’s going to be about the value of time. It’s about how do we use our time, how do we focus our products and our customer experience on valuing their time above all else.”

Luxury makeover

This summer at the Pebble Beach Concours d’Elegance, Hyundai unveiled the Vision G concept. The coupe, sporting a 5.0-liter V-8 engine and self-opening doors, signals Hyundai’s plans for a successor to the Genesis Coupe, which launched in South Korea more than seven years ago.

“This represents an inspiration for our future family of vehicles,” design chief Schreyer said at the time.

Next year at the New York auto show, Hyundai is expected to unveil a redesign of its top-of-the-line Equus for model year 2017. Hyundai also has developed a twin-turbo, 3.3-liter V6 engine as an efficient-yet-powerful option for the Genesis family.

The more that Hyundai’s luxury cars grow in quality, refinement and price, the more that a subbrand begins to make sense for the company, said Larry Dominique, president of the car-pricing service ALG.

“To make this a successful path for Hyundai, they’re going to have to put some energy and thought and money into making it a differentiated experience,” Dominique said. “If you’re saying ‘Hyundai Genesis’ and ‘Hyundai Equus,’ people are going to associate those cars with the Elantra, and that’s tough to dissociate yourself from when you want a buyer to spend $60,000 or $70,000.”

Longstanding ambitions

Hyundai had considered a high-class subbrand for years.

Like the Korean electronics giants LG and Samsung, which have shifted from competing on cost to competing on style and prestige, Hyundai wants to strengthen its position in the profitable luxury segment and protect itself from low-cost challengers in China and elsewhere.

“Korea wants to take its place globally as a country that is producing premium products, and this goes hand in hand with that,” said Don Southerton, a Colorado-based consultant on U.S.-Korea business relations who works with Hyundai. “Hyundai wants to be seen as a mature car brand.”

Hyundai wanted to balance the steep cost of a new retail channel against the benefit of a dedicated luxury-car strategy, Hyundai Motor America CEO Dave Zuchowski said in a 2012 interview.

“There’s a conversation going on within the company that says, ‘Does having the Hyundai badge on the premium vehicles sell more vehicles, or does it restrict us from selling more vehicles?’” said Zuchowski, then Hyundai’s U.S. sales chief.

Within weeks, Hyundai tamped down talk of a Genesis brand or subbrand, with a Korean spokesman saying the company had no such plans.

It focused instead on perks for luxury buyers such as a concierge service called “Your Time, Your Place,” through which specially trained employees would pick up an Equus at the owner’s home or office and bring it to a dealership for service.