Hyundai launches new luxury brand: Genesis [w/ poll]

Hyundai-25On Wednesday Hyundai finally announced what many have been speculating for years: that it will spin off a new luxury brand under which it will sell its Genesis, Equus and Coupe models. The brand will be named after the most popular model of the three, the Genesis, taking advantage of the name recognition it has earned since its 2008 debut. It will be the first major luxury brand created since Infiniti, the last of the Japanese luxury brands, came to the market in 1989.

So, what should we think of this? Does Genesis have a chance to succeed in the increasingly crowded luxury market, or does it not have a snowball’s chance in hell? Here are three reasons why I think it could succeed:

1.    The existing cars already sell well

Assuming the new brand does not change its models’ pricing drastically from the off, it’s reasonable to expect that the sales performance of Hyundais Genesis, Equus and Coupe models are a good prediction of how well the new brand will do. And the signs are very good – the models have sold globally pretty well from the very beginning, especially the BMW 5-series sized Genesis sedan, whose 2nd generation launched in 2014 practically doubled the model’s sales between 2013 and 2015. The three models combined could sell 100,000 units in 2015, not bad given that Infiniti barely cracks 200,000 globally after 25 years. And the new Coupe and Equus are right around the corner.

Hyundai Genesis sales2.    Hyundai has been doing it right from day one

Hyundai Genesis 2The single biggest pitfall upstart luxury brands created by large manufacturers can fall into is that they rely too much on platform-sharing with its mainstream cousins. Think most Acuras or the atrocious Infiniti QX4 (Nissan Pathfinder), G20 (Nissan Primera) and I35 (Nissan Maxima). Instead, Hyundai invested in a proper RWD platform from the very beginning (the first it did itself) and the results show – the Genesis, Equus and Coupe were all instantly differentiated from the mainstream Hyundai models.

3.    They hired Luc Donckerwolke to head the design

Luc DonkervolkeA big part of Hyundai and Kia’s recent sales success has come from its design, masterminded by father-of-TT, Peter Schreyer. Not keen to rest on its laurels, the company poached another of VAG’s wunderkinds, Luc Donckerwolke, to head up the Prestige Design Division. You could hardly do better than the man who reinvigorated the design of three separate brands under VW’s umbrella: Lamborghini (Murcielago and Gallardo), Seat (Leon) and Bentley (Conti GT, Mulsanne and EXP10 Speed 6 concept).

But, what do you all think? Leave us a comment below and make sure to vote in the poll:

Can Genesis succeed as a luxury brand?

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  1. I totally agree with you on the mistakes that Acura and Infiniti have made. At least the latter has been doing pretty well with their latest models.
    So, I guess they’ll be launching a couple of SUVs as well in the next few years, otherwise I’d have to say they won’t make it.
    I just don’t really like the new alphanumerical names, just as I don’t like Cadillac’s new nomenclature, but I guess manufacturers think that’s a requirement for doing business in the premium car segment: pretend to be as similar to the Germans as possible.

  2. One word: Xedos.
    Second words: impending finance crisis.
    But if Hyundai target the disaffected Buick/Olds/ Cadillac demographic they might get some business. There is a market for comfy, big cars that’s ignored by a focus on pseudo-sporty cars. If Genesis makes a RWD body-on-frame car they’d capture a 100,000 a year market nobody else serves.

  3. Hi Richard,
    I agree with you that there’s some sentiment towards the big and comfy RWD body-on-frames like the Mercury Grand Marquis et al., but I don’t think that there really is a place for such a vehicle in the current marketplace, especially when fuel prices start to rise again (and they certainly will).
    And I really don’t think that’s the demographic Genesis is aiming for. They might get those 100.000 sales a year, but not many more as other buyers would shun a “luxury” brand that’s symbolic for that distinctly un-trendy part of the market. And considering the figures they’re already selling, the aim is much higher than 100.000 a year. Still, with the Genesis and especially the Equus they already are aiming more for a comfortable set-up than a BMW-wannabe sporty character and perhaps that’s exactly why they’ve been doing so well.

    1. That’s my idea too. Plus they rate very
      highly in the reliability stakes if the partisans at The Truth About Cars are to be credited. I still think there’s a decade or more of business in the BOF concept. Dress it up in modern styling though – it doesn’t have to look like a Buick to sell to that audience.

  4. Another luxury brand just to earn more money per car. Nothing new, we all know that Toyota-Lexus, Honda-Acura, Nissan-Infiniti, VW-Audi and since the beginning of 2015 Citroën-DS are doing the same thing. Most of them for years and years. In my opinion it’s a good thing Hyundai dares to be different with Genesis. For me Audi’s are too much overexpensive Volkswagens or cheaper Porsches/Bentleys and that’s why I don’t consider Audi to be ‘premium’ whatever that may be.

    I think Genesis can be instantly succesfull in the USA, because new brands that deliver quality and substance are quikly accepted in the States. In Europe it will be tough, European consumers are very conservative. BMW, MB and Audi dominate the market.

  5. Hi Losange, I totally agree with you that it’s so much easier for an aspiring luxury brand to break through in the United States than it is in Europe. The competition from the Germans is simply too fierce, they have such a strong presence in their home market Germany, which is Europe’s biggest market for luxury cars, and because of their worldwide scale can offer them at competitive prices.
    In the US, the battlefield for premium brands is much broader, with Lexus a tier-1 player, and Infiniti, Acura, Cadillac and even Lincoln grabbing fair shares of the market. Hyundai already has a better image in the US than in Europe as well, and have sold the Genesis sedan here in significant numbers, so it’s easy to predict they’ll do well there. But in Europe? That’s a whole different story.

  6. I think the reason why brands like Lexus, Infiniti and Cadillac find it hard to “crack Europe” has to do with badge snobbery. Sure, their cars are never class-leading but sometimes they are pretty great (e.g. Infiniti QX70 nee FX, Lexus IS, Cadillac CTS), and yet people rarely consider them because they lack the established pedigree. For better or worse, American customers seem quicker to embrace new brands if they feel the product is right.

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