Hyundai’s Genesis RWD luxury sedan was initially aimed at new luxury buyers, with a $33k starting price that sought to lure upgrades from the Maximas and Avalons of the world. But Hyundai VP for NA sales David Zuchowski reveals to Automotive News (sub) that this strategy has failed. “We thought the vehicle would be a nice interceptor vehicle for someone looking to move up to the first luxury vehicle. What we found out is somebody looking for the first luxury vehicle needs the (established) brand,” says Zuchowski. “Conversely, we are attracting more people from BMW, Mercedes, who are probably tired of paying premiums for the brands.” This year Hyundai hopes to sell 8k of the new luxury model, ramping up to 20k units over the next several years. “Genesis is not going to be a huge volume, but will have a huge halo effect, it will elevate the entire brand,” says Zuchowski. “For years, we’ve said we don’t have a product problem, we have a perception problem. The gap between what people think of our brand and what our products really are is as large as any in the industry.” This perception-gap complaint somehow comes across a lot more credibly from Hyundai then it does from the usual suspects from Detroit. After all, Hyundai has gone from being a Rodney Dangerfield punchline to a BMW and Mercedes sales thief in a few short years. Hyundai was considering launching a Lexus-style luxury brand with the Genesis, and though it hasn’t ruled the possibility out down the road, such a plan is unlikely given the Genesis’ apparently-strong halo effect.
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A Genesis might look good to a Wall Street hotshot down to his last $10-million and waiting for the government bailout check.
Why is this on TTAC?
Are you saying you believe the sales guy?
After all, Hyundai has gone from being a Rodney King punchline…
I assume you mean Rodney “I get no respect” Dangerfield…
I hate to say it but just as Hyundai made a better Buick – the Azera, now they’ve made the best new Cadillac ever – The Genesis!
I am glad the Genesis is getting attention and it doesn’t matter from where.
But what disturbs me is the knock on brand image.
Great brand image is not easily gotten.
If they purchased cars simply because of the brand image, they deserve the label of idiots.
But I am legitemately looking for a car now and it has to meet qualifications, and any car that does this the best, wins.
Where I come from, image is good and bad.
In fact, with my white trash friends, buying a car with a Lexus image can be cause for a lot of whispering and negative response.
I don’t see this car as a Cadillac. It is a much better Buick than the Azera, though. Buick, after all, was charged with going after Lexus by offering 9/10 of the car for 7/10 of the price…which is what Hyundai has done with the Genesis.
It does sound like the car’s sales aren’t meeting internal expectations. That’s when people start talking about “halo effects.” Over at genesisowners.com, the people buying these cars seem to be a mix of first-time luxury buyers and those trading down from premium brands. One guy (or was it even two?) traded a Neon SRT4–which still has me scratching my head.
Aiming for an initial reliability result in February.
http://www.truedelta.com/reliability.php
This car comes at exactly the right time. While the 1st part of the decade was all about conspicuous consumption, it’s now becoming chic to be frugal. And in the automotive world, what’s more frugal than a Hyundai?
The stigma of “non-luxury” brands is slowly disappearing. I unfortunately live in a rich area, and have seen many soccer moms downgrading from Range Rovers and BMW SUVs to GM crossovers and the like.
I’m long past caring what the neighbors think, and I would give this car a serious look for the wife. The nice part is that she is in a minivan for a few more years until the rugrats move on so by the time we’re ready to buy, Hyundai will be further along and should have their “upscale line” plans sorted out. Should be an interesting watch……….
I never understood the concern about image. Unless you have to transport clients around, or are a single male looking to pick up girls, I really don’t see the point. Especially when 3-Series, C-Classes, A4s, even Cayennes are everywhere
I made it a point to drive a Genesis during a recent press day. Although it is not the car for me (too big, too soft, etc) I have to give credit to Hyundai for an on-target first shot into the market.
The Genny is a “Korean Buick” — comfortable, not bad looking (‘cept the grille…), nice interior, mostly pleasant manners — and will compete well in that market segment.
The “go-stop-turn” characteristics of the car are at least on par with US entries in the class, and ahead of some. Equal to Acura, Lexus, BMW and M-Benz? Ummm, not so much. Yet. But this is in no way a “bad” vehicle; lots of folks are going to love it.
I did have a chance to chat with one of the corporate handlers…he agreed that the model will have to seek its own level in the marketplace and that the real competitors may be yet to be identified.
He also noted that he personally thought the car was a bit overpriced for the intended target market, and that they could probably sell way-more if they could bring the price in near $30K.
I need to go test drive one some day. It is about time another value brand besides Nissan is challenging the overprice Euro entries.
On a side note, Acura tried and succeeded to an extent and now have a platform with AWD on at least 2 sedans. But of course Acura screwed up again by making their cars so bland and hideous looking.
Will 22″‘s fit on this thing?
Bout to start a new trend…
A Genesis sub-brand would be a horrible idea, even with the coupe being called Genesis too. In fact, I don’t think we’ve seen this much Genesis since the 80’s.
And what’s confusing is the Kia Borrego (quite possibly the worst name ever) is being offered as a luxury SUV.
Wasn’t the point to have Kia be the sporty brand and Hyundai the luxury one?
I would have predicted what Hyundai predicted (a lot of Japanese mid-size sedan conquests), but this actually makes a lot of sense.
After owning one German car I have said to myself what others have said with regard to Germany: “Never Again.”
Fool me once shame on you, fool me twice shame on me.
Also, once a person is established with his or her house and job there is not much left to prove with a hey look at me I’m hip and trendy European logo.
Still this thing is priced damn close to G35s and M45s, and Infiniti dealers are fucking amazing.
If a person gets an Elantra as a loaner while the Genesis is being serviced there’s going to be an unhappy customer – if they don’t get a free loaner at all there is going to be a very unhappy customer.
I’ve always thought hyundai hasn’t had a fair shake…
I drove an 02 elantra for a while and though it was surprisingly well made and had decent power for the economy car it was and handling wasn’t too shabby either. It was primarily the wifes car though and we needed something to haul the dogs around in so we traded it in for an Element.
I would definatly look at the genesis… I admit 30k + for a hyundai is daunting, but I would think that the genesis would be a lot less finicky than a BMW or Merc.
As a first time Hyundai owner (nearly 3 years now) I continue to be amazed at the dissing that goes on towards Hyundai. When we got our 06 Sonata, it joined two Nissans and a Porsche in our garage and I can now say it has been the most reliable and pleasant car we have ever owned (31 in total).
The issue of depreciation is also interesting. My brother bought a 06 Chrysler 300 the same month I bought our Sonata and paid nearly $9,000 more than I did at the time (similarly equipped with leather, stability, sunroof, V6, etc). His 300 is now worth about $1000 more on the resale market – with similar miles. And a Ford 500 of the same vintage is worth LESS. I won’t even mention the depreciation impact on the same vintage Malibu or Impala. My point, it is my contention that the Hyundai depreciation ratio is now exceeded my the big 3 – and this is backed up by the lease residuals that are (no longer) being offered.
I think the Genesis will be one more point of proof that people, such as myself, will get over the myth and happily buy Hyundai instead of Cadillac, Buick, Lincolns, or maybe, just maybe, BMW. I now have friends who know me to be a pretty discriminating car buyer and who have now ridden in the car considering one – or an Azera and now a Genesis.
The Genesis still has an uphill battle when it comes to dealer experience…your average Hyundai dealership doesn’t compete with your average Lexus or BMW dealership when it comes to sales/service.
Here’s my plan for Hyundai Genesis domination: what in NYC is called the “black-car” market.
Car services.
Now that the Town Car and Crown Vic/ Marquis are about belly up, Hyundai needs to import their long wheelbase version of the Genesis (designed for the chauffeur-driven executive) to the U.S. In V6 or V8, with RWD, nice interior and lots of legroom, not to mention at less than what a Town Car costs now and (hopefully) without the crazy depreciation, it could be an instant hit.
One question mark would be long-term durability on NYC’s potholed streets at 75,000 miles a year, but what better torture test? You also get people (passengers) to sit in one of your cars who might not have looked at one otherwise.
The only fly in the ointment is NYC’s push to get all taxis to go hybrid, but I think black cars are exempt from that for now.
JT:
I think if the price is brought in too low, people won’t think it’s a premium car, and will look it over in an instant. Same concept that sells overpriced Coffee.
ferrarimanf355 :
I assume you mean Rodney “I get no respect” Dangerfield…
And we’ll all assume you’re too young to remember. I’m only early 30’s but have the advantage of seeing the video on local news the very next morning of an incident which occurred 5 to 10 miles from my house.
It was a Red Hyundai Excel. One of the most bare bones cares available. I was young enough not to pay much attention to such things, but Hyundais certainly had a poor reputation at the time and the King incident definitely did not help.
Years later, Kia appears to be increasing its own quality at a better rate than Hyundai was able to originally – assuming the Rondo is a reliable indicator.
Hyundai and Kia are the same company.
I tried the Genesis 3.8 last week, and was quite impressed by how far it’s come.
Unlike other reviewers, I thought this car’s ride is too harsh and firm. Noise suppression is better than my ES300, but the Genesis really isn’t Buick-enough for me. Add the fact that it’s RWD when its competitors are AWD, it’s now off my shopping list.
I think either the AWD MKS, S550 or LS460L is probably my next car, though I’ll have to drive them in a few months to make sure. And with the crazy price difference between US and Canadian MSRP, I’m likely to cross-border shop just for arbitrage reasons.
Still, kudos for Hyundai for making me cross shop it with the luxury brands.
I know a bit about myself. I know I value fun and dynamic driving. I value balance and response. I also value a leisurely pace and serene travel. I may never find a car that gives me all this at once exactly like I picture, but I appreciate when I can get some of my needs meet through driving. It is still pretty fulfilling.
The Genesis has a long wheelbase, which sacrifice nimbleness given the package as a whole. Less nimble equals slower responses, I think. Its a bit heavy which can strategically placed and suspended induce nimbleness to some degree. I’m still learning so I’m not sure what I’d settle for. I do think its a Genesis I’m looking for. The C300 is pretty close. The 3-series is perhaps too um..impatient. The New A4 looks really interesting. It may be the car most for me. What is important is that I now what is truly significant to me.
We just had a 1987 Hyundai Excel this week go through my lane. It had only 48k original miles and was absolutely pristine. Sunroof, automatic, original paint, and at least a dozen people laughing once it got on the block.
If this fellow is being honest, Hyundai North America needs to hire some smarter folks in their marketing department. What they’re going through now is virtually identical to what Toyota went through with the Lexus LS400. That model’s conquests came primarily from Mercedes and Cadillac (not so much BMW) and with buyers who were generally looking for a luxury vehicle at a lower price point.
Hyundai NA needs to get on the ball pronto. They ought to be developing or acquiring databases of folks who have owned late model BMW’s, Benzes, and several other models that have numerous recalls and reliability issues (Volvo would be a very good add-on in that regard). Heck, they could even get some nice lists from the lemon law remarketers at the auctions. With even the most basic of CRM tehniques, Hyundai would literally have tens of thousands of potential customers for their Genesis.
The SRT-4 guy buying one actually doesn’t surprise me. You would be surprised how many people put a car on their list based on horsepower. That’s one of the many reasons why we have Camrys these days with 268 horsepower. The numbers alone can make people feel ‘safe’ or ‘masculine’ depending on the nuances within their mindsets.
After sitting in the Genesis, I can say I would consider it as a replacement for my aging Cadillac. The interior was remarkably upscale, and it doesn’t surprise me that it’s getting attention from luxury car owners (though people obsessed with image probably won’t jump from their Mercedes/BMW/Etcetera).
The Hyundai dealer only had the V6 at the time, I’m interested in test driving the V8 when it comes out.