Friday, March 7, 2014

The Genesis Revelation

Here's the thing -
Korea has become a respectable car maker.
10 years ago, if anyone had predicted that Kia and Hyundai would be the next automotive superpower, they'd been laughed out of the industry. Anyone saying that the Seoul duo would be the next Honda and Toyota would have been immediately escorted to the nearest mental health facility.
And yet here we are, 5 years into the Korean onslaught, and things are only getting better. Every generation and new model introduced has one-upped the last. What started with the mid-size category shattering Sonata grew into a full line of Sorentos, Velosters, a Civic replacing Forte, and a Jetta fighting Elantra, as well as many other viable competitors.
What was once a simple matter of affordable transportation has turned into a juggernaut of quality and value. And the flagship and face of the "New Korea" has been without a doubt the Hyundai Genesis. A model that is every bit the Korean alternative to the likes of the BMW 5 series and Lexus GS. There's only one problem... it's still a Hyundai.
I have no problem with this fact. I love rooting for the underdog. Hyundai taking a swing at the old guard? Bring it on! They even gave M and AMG a scare when they released their R-Spec with its meaty 5.0 Tau engine and slick sport-tuned suspension. And Hyundai did it all for half the price! However, everyone has said the same thing: it's still a Hyundai. And it gets worse.
Two years ago, Hyundai pulled an even higher card out of its sleeve when it introduced the Equus. This was a Korean car, a Hyundai, that was meant to take aim at cars like the Lexus LS and Audi A8. Once again: it's still a Hyundai. It comes with every qualification and every feature that the other models do, except for one. That is a fancy badge with brand cache to carry it to that desired status. It, however, is also half the price of its competitors. It is truly a car that represents value and substance over flash and recognition. It doesn't just stomp on the phrase "only a Hyundai", it obliterates it.
However, the market has been more than slow to respond. For reference, in its first full year on the market in the US, Lexus sold 42,806 LS400s. It was such a successful launch that 5 months after it hit the market, it had surpassed The Mercedes S-Class and BMW 7-Series for sales. Alternatively in 2011, its first full year in the US market, Hyundai found homes for 3,193 Equus’. That’s a number that all of its competitors managed to at least double, in most cases triple. The launch of the Equus can only be likened to one other automotive fumble, the Volkswagen Phaeton. The Phaeton was another great luxury car handicapped by its “everyman marquee” to only be able to move 1,433 units its first year in the States. It was pulled out of America after just 3 years of disappointing results.
So what is Hyundai to do? How do they keep their upmarket offerings from becoming the new Phaeton? They have built these phenomenal cars, and they will never get the respect and rack up the number they deserve as-is. In fact, there is only one thing to do. They must take one last page out of Toyota’s playbook before coming into their own full-fledged juggernaut-of-a company. They must pull a Lexus. As Toyota made its own special brand where it could place its luxury offerings to separate them from the plebeian Toyota name, Hyundai must do the same.
It is time for Hyundai to introduce the Genesis brand. They already have a solid start, with the Equus and Genesis Sedan and Coupe. Now, all they would need is to round out their offerings with an upscale SUV, maybe something like an upgraded Santa Fe, with luxury trappings and an exclusive engine choice, maybe the Tau, and an entry level 3-Series fighter. And I here that last one is already on the way.
But there is one more thing. The Genesis brand must be more than just a value proposition. The Equus and Genesis models carry the unfortunate burden of being “almost as good” for much less money. Lexus did not take their huge bite out of the market by making the LS400 almost as good as the contemporary 400SEL and the 730i. They started with building what was the most advanced luxury sedan ever seen in 1990, and still pricing it below the competition. With advanced comfort features which minimized intrusion of mechanical functions both inside and outside of the car, the car was far and beyond anything the other luxury brands were offering at the time. In fact, the LS was so good that it secured Lexus’ place in the market, even when it doesn’t always meet expectations. We’re looking at you, tarted up Camry. Sorry, ES350.
The Equus is “nearly as good” but until it’s better, it’s always going to be a $60k Hyundai, and an also-ran. Look how seriously engineered the Phaeton was. There were 10 secret parameters that had to be met in order to prove that it was ready to take on the S-Class. Even after meeting those, it still flopped in the US car market because it was “just a Volkswagen”. The Equus and Genesis need to exceed every expectation, but also develop their own identity.
Once Hyundai realized that you can't force the market to recognize your cars based on their price alone, and that rebranding is a legitimate exercise in expansion, they'll see much more return on the investment made in their upscale automobiles. And then, they'll finally be able to sell eye-to-eye with the German, Japanese, and American luxury divisions. After all a Genesis isn't "just a Hyundai".
And that, that's the thing.

1 comment:

  1. I half agree, yes, a Genesis brand will lure new customers into show rooms. However, they still need to improve quality. Yes they have a ton of features and options, this is great, and for someone who is looking for the most amount of features per dollar, they propose a valuable attraction. However, they need to pay more attention to the details. Simple things like If they swapped in ceramic switches in place of plastic, shock absorbers on doors/storage areas/etc, and completely removed cheap plastic interior trimmings. They would be able to keep far more customers loyal to a Genesis brand.