Hyundai has announced that it will spin its Genesis-badged luxury saloon off into a separate premium-badge brand by 2020, and will begin with a line-up of a compact saloon, large saloon (a replacement for the current Genesis), two SUVs (both mid-size and large) and a coupe.
The announcement comes as Hyundai is looking to shake off several quarters of declining profits as its sales in China, Russia and Brazil stagnate. The Korean giant is doing well in Europe though, where sales are on the up and the announcement of the Genesis plan has been broadly welcomed by analysts. "Using the Genesis brand name will have a positive impact as the Genesis has proven its quality and worth from the first-generation model and has gained popularity in Hyundai's key markets," said Shin Chung Kwan, an analyst at KB Investment & Securities Co, speaking to Bloomberg News. "The new brand will help increase profits and improve the brand image of Hyundai."
The next-generation Genesis will become the Genesis G80, while the larger Equus saloon will become a range-topping G90. The styling of the new range, as with the rest of the Hyundai line-up, will be overseen by former Bentley and Lamborghini designer Luc Donckerwolke.
Brand equity
Would a new luxury brand linked to Hyundai work well in
Ireland
though?
Stephen Gleeson
, managing director of Hyundai Ireland certainly thinks so. While there have been no direct discussions yet about bringing Genesis to Ireland, Mr Gleeson told
The Irish Times
that “we certainly have the brand equity in Hyundai to be able to start selling premium models.
"The fact that we sell a significant number of . . . €55,000 Santa Fe models seems to prove that, so I would be delighted to be given the opportunity to sell a full Genesis range here. It's really all down to making sure that the line-up includes engines that are relevant to the Irish market."
It seems that, as and when it happens, Genesis will be sold here through two dedicated dealers at first, who will use separate showrooms to the standard Hyundai line-up.
Dublin and Cork have been spoken of as the primary locations but nothing has as yet been decided. There is also as yet no word on whether or not Genesis will develop diesel-engined models. According to Hyundai insiders, the idea of a diesel Genesis is “being looked into” but there are no firm decisions yet, and given the turmoil in the European diesel market right now, Hyundai might well take the decision to have Genesis skip a generation and go straight to plugin hybrid or pure electric power.
The current Genesis saloon is available only with a 3.8-litre V6 petrol engine. It’s not officially on sale in Ireland, but there is a limited supply of right-hand drive models available in the UK, where prices start from a fairly whopping £48,005 (€68,000).
No guarantee
Does Genesis represent something of a risk for Hyundai though? While it might seem logical to build up a luxury brand, and while that brand will sit neatly alongside regular Hyundais and the new N-badged high-performance models, there’s no guarantee that it will result in spectacular sales.
Hyundai needs to look at Lexus to see how hard it can be to establish and expand a new luxury brand. Lexus has sold just under 500 cars here so far this year, and this has been a pretty good year for the brand, yet it's moving a fraction of the stock of BMW, Audi or Mercedes. Even Jaguar, a brand with an astonishing history and towering levels of recognition, struggles to sell against the German big three. Hyundai could be about to spend a lot of money on developing some seriously impressive luxury cars that few people will buy.
Yes, Lexus sells strongly in the US market (and that is primarily where Genesis will be aimed) but it struggles in Europe, and Nissan's Infiniti luxury brand, also a big US seller, has utterly failed so far to gain more than a toe-hold in Europe. Lexus has spent an estimated $5 billion on development and marketing and took more than a decade to just break-even.
Then again, this may not be about raw sales figures. Hyundai has impressively deep pockets and could easily absorb the costs of establishing a luxury car brand. If that brand goes on to have only small sales compared to what Munich and Stuttgart manages, then perhaps it’s a case of so what? This could be much more about Hyundai staking its claim for a place at the top table to global motoring.
