A new title for Genesis Motor America’s top U.S. executive, Erwin Raphael, is one of the smaller tweaks taking place at Fountain Valley’s luxury carmaker, which abruptly switched sales strategies last year and is finalizing its new plan.
Raphael this month was named the carmaker’s chief operating officer. He was promoted after serving as general manager for three years, shortly after the company’s 2015 spinoff from South Korean parent Hyundai Motor Co.
Raphael said much like his vision for the carmaker, his responsibilities—leading strategic direction, management, sales and marketing—will remain relatively the same.
“My promotion to chief operating officer shouldn’t change the future of Genesis because Genesis is so much bigger than any one person,” he said. “I look at my job as being the chief curator of the brand.”
Along with being a custodian, Raphael has a bit of bodywork to do at the company, which is housed in Hyundai’s massive office along the San Diego (405) Freeway.
There’ve been plenty of plaudits for the carmaker. Its G70 sedan, which starts around $35,000, was named 2019 Motor Trend Car of the Year.
That didn’t translate to sales last year.
The automaker sold 10,312 units last year, down 50% year-over-year.
The drop came after Hyundai said in 2017 it would overhaul its U.S. dealer network. It stopped shipping cars last March to clear inventory to restructure its retail model.
Company officials said its new network for Genesis should be finalized before its inaugural dealer meeting in April.
Young Brand
A decision to change the luxury vehicle’s network was done to create distance from its association to the mass-market Hyundai brand—which sold nearly 670,000 cars in the U.S. last year.
That distancing will eventually result in standalone dealerships for Genesis. Expect to see a heavy marketing push to build brand awareness as well (see separate story, this page).
Genesis’ head of marketing Kate Fabian said the key to driving consumers inside its showrooms will rest on a marketing message attracting luxury consumers without being too exclusive.
“Think about traditional luxury, it was all about the badge, the name and feeling a bit elitist,” Fabian said. “We are anything but that … we’re a very young brand.”
“We have an interesting story to tell … for me, luxury is about [saving] time,” she said.
Future of Retail
Genesis plans to double its lineup from three to six models over the next three years. Offerings will include a midsize CUV followed by a smaller CUV and a yet-to-be announced third model.
Details are slim on dealership designs since it’s “just now starting to put pencil to paper,” but Raphael said locations would be a mix of standalone showrooms and locations at shopping centers—think Tesla’s outpost at Fashion Island.
“We need people to experience the brand so [doing] it at a shopping mall is the way to go now,” he said. “The shopping mall is more of an experience—people go to discover new things, to feel and to see.”
It’ll take time before those facilities are established so consumers in the short-term will still find most of Genesis’ showrooms sharing a facility with existing Hyundai dealerships.
“They will have a showroom within a showroom but still deliver the Genesis experience, which is going to be a huge challenge but it’s one that we have to do,” Raphael said.
Last year, it completed the process of securing distribution licenses in 50 states and Washington, D.C., a process that took nine months.
It’s now offering dealers the option of signing a new franchise agreement, separate from Hyundai, or taking a buyout based on past sales performance.
Dealers who sign on will receive the 2019 models. As of today, there are 246 Genesis franchised retailers across the country and company officials said the number should climb to as many as 325 by late April. Genesis has three franchises in California, but that figure will grow to 35 in the next month.
“We have to deliver an experience that’s as phenomenal as the product,” Raphael said. “The dealers are highly motivated and we can’t wait for customers to walk in to some new ideas about the future of retailing with Genesis.”
