The recently established Genesis Motors USA in Fountain Valley is technically a rookie company on the automotive stage—just don’t call it that.
“We think we paid our dues,” said Hyundai Motor America Inc. President and Chief Executive Officer Dave Zuchowski during a recent media presentation.
“We’ve been doing this for seven years—since the first Genesis was the North American Car of the Year—and in that time we’ve grown amazingly quickly. We are no longer a newcomer … certainly not as (established as) BMW or Mercedes, but … we are not a new kid on the block.”
The idea of a luxury brand has been on Hyundai’s drawing board for the past decade, but the automaker was waiting “for the right circumstances and the perfect alignment of the stars” to discontinue its Hyundai Equus and Hyundai Genesis premium sedans and develop six models under a Genesis-only nameplate.
“We are at that time,” Zuchowski said. “The luxury market is big and has grown for seven consecutive years, and as a percentage of the total industry is at its highest point ever, and we don’t think that growth will stop anytime soon. … And we want to be part of that growth.
“We’re going to come to the market blending the whole idea of product and experience with some really great and exemplary customer services. That combination we don’t think exists right now, and that’s what’s going to differentiate us in the market.”
The new company, which was formalized in March, is “not just an offshoot of Hyundai,” he said. At its helm is General Manager Erwin Raphael, a 25-year automotive industry veteran, along with Marketing Manager Kate Fabian. It has its own budget for staff, research and development, marketing and media buying. It works with Innocean USA in Huntington Beach—also Hyundai’s advertising agency of record—but has a designated Genesis-only team there.
“Genesis was formed as a separate and independent company,” Zuchowski said. “We are not launching a new brand, we are starting a new company, and we are funding this in exactly the same way. We can’t use the same resources that we have for Hyundai for Genesis and expect to succeed … This is really important to us, and we are going to do it right.”
R-E-S-P-E-C-T
The midsize G80 luxury sedan, which starts at $41,400, arrived at dealerships this month, Raphael said. The full-size G90 will follow next month for a yet-to-be-announced price.
“We are excited,” Raphael said. “I spend a lot of time here at work but also at home thinking about what we have on our plate and the best way to do it, collaborating with people all over the world, literally. It never stops.”
The vehicles are being sold through a subset of about 350 Hyundai dealers, in carved-out space for the brand.
“Frankly, we just couldn’t get dealer sales and service agreements, state franchise requirements (for Genesis). It’s a lengthy legal process, and in order for us to retail the cars we wanted to, we started what we call the showroom in a showroom strategy,” Raphael said.
Within the next five years, Raphael said, the company plans “organic migration” to separate showrooms, as well as to dealers that own Genesis-only franchises.
Initial demand has been good, he said, adding that “we already delivered over 200 of them—they are coming in and being sold right away.”
But “we are not focused on just numbers, on volume … More than anything else, we want the customer to feel respected. When we did our customer research, that’s the word that kept coming up over and over. All of the things we have planned around the Genesis experience really revolve around respect.”
For example, he said, Genesis is avoiding “nickel and diming” customers during the first three years of ownership by providing free scheduled maintenance. It’s also showing sensitivity to their time constraints by offering free vehicle pickup for service, as well as a loaner car. The concierge service comes in addition to voice-control features Genesis was able to offer in partnership with Amazon, including remote car locking, ignition and temperature control from the living room or office.
“It’s this concept of having interaction without having to have something in your hand,” Raphael said. “And I know it’s the next and the most progressive form of interaction, because Google and Apple are also working on something that will behave very similarly. We are the first brand to come to market with connected car skills, so we jumped all over it.”
Targeted Message
Marketing manager Fabian is working with Innocean on TV ads that will air during the start of the National Football League season on Sept. 11.
“We’ll have spots playing during the Sunday games and on Monday night broadcast on ESPN,” she said, adding that the newly independent Genesis will be the league’s sole official luxury vehicle after the Equus is discontinued.
Hyundai is paying an estimated $50 million per year as the official vehicle of the NFL. Zuchowski pointed out that all budgets are separate for the two companies, so Genesis will likely pick up the luxury-car sponsorship costs.
Genesis plans to air one commercial right before the season’s Sunday game kickoff and a couple more during the game.
“For the first time in my life, I can tell my wife that I have to watch this football game today, it’s part of my job,” Raphael joked. “We will use the opportunity to communicate to the world that we are here … and tell them a little bit about us and how we handle business … It’s an introduction to the brand and an introduction on our take on how much the customer really demands respect, and as a brand that’s what we’ll focus on—demonstrating respect in a world where everyone is pushing themselves and their product and putting themselves ahead.”
The spots also will play at high-end movie theaters around the country to help Genesis “get to where potential premium customers are and let them know who we are.”
The automaker took about 80 members of the print and digital media on a 250-mile ride in the new vehicles and plans to place ads in select media outlets.
“The bottom line is only 2% of people around you are in the market for a new car, and only 12.4% of [those] are in the market for a luxury car,” he said.
“So when you’re dealing with such a small number of people, you really want to be tactical, and digital is the right way to do that.”
Genesis also plans other strategic sponsorships.
“We are also the title sponsor of one of the most prestigious and widely watched PGA tour tournaments in the world, Genesis Open, held at [The Riviera Country Club in Pacific Palisades] in February next year,” Fabian said at the media conference.
The event is broadcast nationally by CBS and will feature the Irvine-based Tiger Woods Foundation as the host organization.
