The Hyundai and Genesis Brands' Split Is a Little Messy
Many dealers are not happy with how Hyundai is handling the Genesis transition.
The genesis of Hyundai’s luxury brand Genesis has been a little rocky. The marque that became its own luxury brand in 2015 makes some seriously competitive luxury cars at attractive prices, but the process of being spun off from Hyundai doesn’t seem to be going very well. The cars themselves aren’t the issue, and the people who drive them love them, but there’s been some drama behind the scenes.
The most recent example of this unclean break happened at a dealer council conference in Dallas earlier this month according to Automotive News. Apparently, attendees representing dealerships that sell both Hyundai and Genesis brands under one roof got so frustrated with high-ranking executives that they walked out of a meeting over how the Genesis retail network is going to work.
Here’s where the frustration comes from. Back when Genesis was first being spun off into its own brand a couple years ago, Hyundai dealers were told they could keep selling Genesis luxury cars at their existing Hyundai dealerships as long as they have a special spot dedicated to Genesis. Now, Hyundai is changing the plan to distance Genesis further from Hyundai sooner than planned. Hyundai understandably doesn’t like the idea of high-end G80 and G90 sedans sharing a showroom with economical Hyundai models like the Accent or the Elantra. Not that those more affordable compacts are bad cars, it’s just not very good for Genesis’ image as a luxury brand.
So the new plan is to boost exclusivity of the Genesis brand by limiting their availability to a dealer network as small as 100 locations in key markets with purpose-built showrooms just for selling Genesis luxury cars. This frustrates the dealers who've made a big investment in their dealerships to keep selling the Genesis brand, which casts a wider net to more demographics of car shoppers than Hyundai would on its own.
"The company's intent has always been that Genesis vehicles will be sold exclusively through a distinct Genesis dealer body that is profitable for dealers and will deliver the luxury experience Genesis buyers expect," Hyundai said, according to Automotive News. "Both the company and the dealers are in complete agreement that this is critical for the success of the Genesis brand and the dealer body."
Apparently, walkouts at dealer conferences are a sign of “complete agreement.”