Hyundai Motor America Inc. plans to break out of the pack of Orange County-based auto brands with the launch of a stand-alone division of premium vehicles named after its Genesis luxury sedan.
The move is similar to Toyota Motor Corp.’s approach with the Lexus nameplate or Nissan Motor Co.’s with Infiniti.
“When you want to do something like this, having the product really is still the center of it all,” said Mark Dipko, director of corporate planning and strategy for the automaker. “[We’re not] trying to put a facade on a vehicle that maybe isn’t a luxury-class vehicle. It is in every way designed and engineered to be a true luxury vehicle. This is a real authentic play that we are making here.”
Hyundai Motor America Chief Executive David Zuchowski will oversee the new line from the automaker’s North American headquarters in Fountain Valley.
The move holds the potential to prompt new hires locally and business beyond the automaker itself—the Genesis line could be seeking an ad agency besides Hyundai incumbent Innocean USA in Huntington Beach, for example, although executives with the automaker said it’s too early to tell.
The company had plenty to say about the new line’s target audience, drawing a bead on the “millennial generation or savvy affluent progressives” who “prefer concise and highly intuitive user conveniences and value new technologies,” according to Hyundai Motor Co. Vice Chairman Euisun Chung, whose remarks from the parent company’s hometown of Seoul, South Korea, were aired live to a gathering of journalists in Fountain Valley.
The Genesis vehicles will feature a wing-type emblem, a change from the marque on the current Genesis sedan. The new line will adopt an alphanumeric naming protocol with the letter “G” and a number—90, 80, 70—to represent the segment—sedan, coupe or SUV.
The newest edition of the automaker’s Equus—which had been the top of the Hyundai line—will be introduced next month as the G90, while the original Genesis will be renamed the G80. A midsize luxury sedan—the G70—is in the works and set to debut in 2017. A midsize crossover SUV, a luxury sports coupe, and a luxury SUV are expected to reach showrooms by 2021.
The brand’s design identity—think “athletic elegance,” according to company executives—will be coming from a newly formed Prestige Design Division led by Luc Donckerwolke, whose resume includes stints at Bentley, Audi and Lamborghini.
The vehicles will feature “proactive safety technologies, intuitive convenience features and IT connectivity,” along with rear-wheel drive that allows for premium-style proportion, as well as a long hood and short front overhang, according to Peter Schreyer, president and chief design officer for the Hyundai Motor Group, which includes Hyundai and Kia Motors Corp., a sister brand.
Dealers
Dealers that currently sell Equus—a group of 400 or so that have earned special certification from Hyundai—will be able to offer the new Genesis vehicles as they’re released, according to Cliff Allen, general manager and co-owner of Allen Family Automotive Group in Laguna Niguel.
“They didn’t talk about exclusive facilities—they actually said that is not in the current plan,” Allen said of the conference call that he and other Hyundai dealers had with the automaker late last week. “They did mention exclusive Genesis lounges, separate from your Hyundai customer lounge. I understand where they are coming from, but I have a little bit of a conflict with that, because I believe in treating every one of my customers the same way, regardless if they buy a Cadillac, a GMC, a Hyundai, or a $5,000 used car. I don’t know if that’s the right approach, but that’s the approach I always had.”
Hyundai could eventually require “enhancing your facilities and things of that nature,” he said. “I think what they’ll do is they’ll build the brand, and in a few years look at their volume, look at profitability, and see if it warrants separate facilities.”
Allen just completed a multimillion-dollar renovation of his dealership that will enable him, among other things, to carry the Equus brand. He also had to complete “premium brand training” by Hyundai for sales and service, with lessons on perks, such as pick-up and drop-off of vehicles for test drives.
The emphasis on the high end suggests a “concierge-type mentality” that will have to earn a place in the market, according to Allen.
“We have to be able to make margin, to be able to justify providing that level of service, because obviously that’s going to entail more staff, higher cost, more expenses to the dealer,” he said. “But if we create a brand that allows you to make a few dollars, I think it will be a great day. I expect us to do really well.” The automaker did not discuss pricing for the new line or production volumes.
Genesis, which retails for $53,850 on the high end, accounted for 24,638 of the 607,539 units Hyundai sold in the first 10 months of 2015.
Equus, with a price tag of $68,750, added 2,844 units to the total this year.
Changes
Hyundai has been in the U.S. market for nearly 30 years and has seen dramatic ups and downs. The automaker started fast as a bargain brand, but soon ran into quality problems. It spent years improving its product and repairing its image, and has lately won over scads of buyers, setting a number of annual sales records since the recession.
Its move upscale with the Genesis line marks a milestone that has eluded Irvine-based Mazda North American Operations and Mitsubishi Motors North America Inc. in Cypress.
Irvine-based Kia Motors America Inc. has been in the U.S. since 1992.
