Genesis tries to impress in U.S., China
The brand is considered the brainchild of Chung Eui-sun, Hyundai Motor Group’s vice chairman and heir apparent to his father, group chairman Chung Mong-koo.
Chung Jr. hired Luc Donckerwolke and Lee Sang-yup, two talented auto designers from Bentley Motors along with Lamborghini brand executive Manfred Fitzgerald to take charge of the Genesis lineup.
“[Chung’s] level of managing the Genesis brand is exceptional,” Fitzgerald told Bloomberg at the recent Busan Motor Show, adding that he is “involved in all decisions.”
The biggest challenge for Genesis is shedding the down-market image of its mother company and being recognized as a luxury brand. That kind of image can’t be forged overnight.
A Hyundai Motor spokesperson said the launch of the G90 in the U.S. will be later this year. Its launch in China hasn’t been decided yet.
That model - which is known in Korea as the EQ900 - is selling an average of 2,000 units per month in Korea since it was launched last year.
Korean auto experts say the brand’s quality doesn’t fall short of its older rivals such as Germany’s BMW, Mercedes-Benz and Audi. The big challenge is establishing its own identity within the extremely competitive high-end automotive market.
In that sense, the image of Genesis as a Hyundai Motor brand, with the main feature being affordability, is something to overcome.
“The main competitors for Genesis are the BMW 5 series and Benz E-class,” said a local senior auto analyst from Meritz Securities. “Will consumers in America buy Genesis, which still carries a humble image because of Hyundai, and pay the same price of around 50 million won? I don’t think so.”
With the American luxury car market showing little growth over the past few years, Genesis has an even bigger challenge getting a significant piece of the pie.
“When the American luxury car market was developing in the 1990s, there weren’t that many foreign brands introduced there, which enabled a Genesis-equivalent - Toyota’s Lexus - to succeed,” said another auto analyst from Yuanta Securities.
“The situation has gotten much harder now. There are so many high-end brands that Genesis has to put up a fight while the market itself is dwindling.”
China’s auto market has grown into the world’s biggest and its premium car market is fast catching up to the U.S.
“The Chinese market will be even more difficult for Genesis to penetrate because not only do they have their own premium brands that are tens of years old but also because they have already adopted European luxury car brands such as Mercedes-Benz and BMW,” said Kim Pil-soo, a professor of automative engineering at Daelim University College.
“Whatever strategy Genesis is willing to take in the Chinese market, they have to do it after succeeding in the U.S. Hastily advancing to the highly protective, risky Chinese market will only damage the brand image, which will be almost impossible to bring back.”
Kim emphasized that what Hyundai Motor Group is doing with Genesis - separating it from the non-premium brand and making it a luxury brand of its own - is the right thing to do and something that has a shot in the long-term even in overseas.
“Hyundai has been needing a two-track strategy to generate profit because their value-for-money cars eventually have limits,” Kim said.
“Hyundai has the qualifications needed such as the technology to compete with high-end cars. They just need to approach it correctly and from a long-term perspective.”
A Yuanta analyst also said Hyundai Motor is currently taking the “best strategy possible in the domestic market with Genesis” by spinning it off so that it can compete against European luxury carmakers, while increasing the average selling price at the same time. Also, in the Korean market, where Hyundai is trusted by older customers with the means to buy a luxury car, the outlook for Genesis in Korea is “above average.”
So far, Genesis is off to a good start.
Its newest model, the G80 - the second in Genesis’ six-part lineup scheduled to be released by the end of 2020 - has received preorders for 5,000 units in the first week. The mid-sized sedan is set to launch on July 7.
BY JIN EUN-SOO [email@example.com]
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