Hyundai Genesis not gelling with first time luxury buyers but hitting home with premium brand owners
09/17/2008, 1:45 PM
By Drew Johnson
When Hyundai first started selling cars in the U.S., its offerings were perceived as little more than frugal econoboxes – a perception that was pretty much on point. But over the last few years the Korean automaker has been really stepping up its game, cultivating in its latest luxury offering — the Genesis sedan. Although the motoring press was unsure of how the public would react to a luxury Hyundai, the market has spoken and it looks as though Hyundai has its first ‘halo’ car.
Although the Genesis is the most expensive offering in Hyundai’s lineup – listing from $33,000 – it retails for as much as $26,000 less than its comparably equipped rivals – mainly from BMW, Lexus and Mercedes-Benz. With that fact in mind, Hyundai thought the Genesis would entice first time luxury buyers – those that aspire for all things luxury but don’t quite have the coin for the big time brands. However, Hyundai’s theory has proven incorrect since the Genesis hit the market in June.
Instead of attracting first time luxury buyers, the Genesis is actually attracting buyers that typically shop the top-tier brands. “We thought the vehicle would be a nice interceptor vehicle for someone looking to move up to the first luxury vehicle. What we found out is somebody looking for the first luxury vehicle needs the (established) brand,” David Zuchowski, vice president of Hyundai’s North American sales, told Automotive News. “Conversely, we are attracting more people from BMW, Mercedes, who are probably tired of paying premiums for the brands.”
As such, Hyundai is now viewing the Genesis sedan as a halo model – one that generates a buzz about the brand and can help drive showroom traffic. When the Genesis coupe hits the market next year, the gap between Hyundai’s public perception and product perception could finally be erased – something the Korean brand is hoping for as it possibly looks to start a luxury division in the same vein as Toyota’s Lexus brand in the coming years.
Hyundai is targeting a sales goal of 8,000 Genesis sedans this year, with 20,000 earmarked for 2009.
09/17, 2:07 PM
posted by:
TomF
Makes sense, but I don’t think they have enough data points yet to form a judgment. The car’s only been around a couple of months. They can’t have sold more than 2,000 units yet.
09/17, 2:08 PM
posted by:
Lariat Luxury Locomotive Liner No.3
I’m sorry, but I took a good long hard look at the Genesis and it is a piece of crap; not worthy for its market segment.
09/17, 2:12 PM
posted by:
RaineMan
I have yet to see one of these in person… but I’ve read the reviews and it seems as this is a pretty solid car for the money. I’m still waiting on the coupe version.
09/17, 2:21 PM
posted by:
t-ak-box
I just saw this at a local dealership. Its pretty nice, looks way better in person than pics. I can see others coming from more establish brands for this. A fully loaded 3.8 model with all the goods at the dealership went for 40k.
09/17, 2:57 PM
posted by:
johnnycanuck
However many they sell it probably could be a lot more if they’d actually put the Hyundai logo somewhere visible. We know their spin: they’re hoping the lack of badging makes you curious enough to come take a closer look. I still say how does that work if you have no idea what you’re looking at? They’re forgetting most of us have the attention span of a gnat. If I spot a pair of boobs a block away I could be standing in front of a Veyron and forget it’s there.
09/17, 3:04 PM
posted by:
inspire
“I took a good long hard look at the Genesis and it is a piece of crap; not worthy for its market segment.”
I’m not sure if you read the article properly or not. Hyundai’s target group was first time luxury car buyers, not people who already own “tier-1″ makes. So those who drive an Accord / Camry / Maxima … or those who drive a Malibu / Sebring / Taurus … I realize those cars have come a long way from 10 years ago but seriously … a Genesis worse than that?
Based upon what I have seen (haven’t sat in one yet) and what I have read, I have relatively high expectations when I do sit in a Genesis. I’m not sure I will think it will be a piece of crap as a previous poster has suggested. Will that many critics be all wrong? It’s a first attempt of an unproven company … not something from the established groups (MB, BMW, Audi, Jag, etc). And I think how Hyundai has been on a roll as of late, I don’t think the Genesis can be worse than what’s out there in that price range.
09/17, 3:06 PM
posted by:
MugenSentraKen
=========>>LOL i’m over here ROLLIN’ johnnycanuck! good one lol…
09/17, 3:32 PM
posted by:
drchiem
For 33K I will have to look into car like Nissian Maxima, Acura TL, the Japanese cars are still better car in every aspect. No matter how success Genesis is going to be, people still think it is Hyundai car. Hyundai cars has been known for cheap and not realiable. I might look into this brand sometime in the next two decade. Sorry Hyundai not at this time…..
09/17, 3:51 PM
posted by:
Need more oil for GM
Because Americans would rather buy a Cadillac CTS than some POS Korean sh1tbox
09/17, 3:57 PM
posted by:
tripleonefive
It makes sense. When a consumer is upgrading to a luxury vehicle they want an established car from an established brand (Bimmer Benz Audi Acura Lexus Infiniti) not a Hyundai.
Hyundai has to realize that people in this catagory are not necessarily worried about price bc they either have it or lease it.
Hyundai is a reliable company more so than GM Ford and Chrylser. KBB gave them a 33% bump in resale value. They are still not there with the Japanese but I think that will change in the next 5 years or so. They build a trustowrthy product and I hope they reach their sales goal.
I will say that they need to get their own design language and stick to it like BMW or MB
09/17, 4:56 PM
posted by:
cardude
What does it mean gelling?
09/17, 5:09 PM
posted by:
dorikin_86
Surprising – I guess 1st time luxury buyers need to fill their egos then their wallets =)
I personally think the Hyundai is a terrific buy if it serves purely as luxury transportation…provided it proves to be reliable enough.
09/17, 5:10 PM
posted by:
A4
im sorry but if im ever cross shopping a poor-mans BMW 5-series im going to be looking at something else in the excitement realm, ala Pontiac G8, last-gen Accord V6, even an Impala SS, or hell just a slightly used 3-series. You can get a brand new Charger SRT-8 for less than a V8 Genesis these days, and just the lesser Charger R/T puts out similar numbers. The genesis will only be stealing sales from mostly old people who wanted something a little nicer than a Buick, Lincoln, or Toyota when that niche market the Genesis has seemed to find wasnt in place yet, so they went for the BMW, or Benz. I saw a genesis at a gas station the other day and the styling is more generic than store brand peanut butter. Id say even the Azera looks better… and the front end looks absolutely stupid with no badge on it.
09/17, 5:43 PM
posted by:
brocky
Saw one on the freeway during the evening and I thought it was a new Lexus or something close. I must say it looks pretty solid in person. And NO: a car shopper looking for a very roomy sedan would not shop for a CTS. CTS’ are pretty sweet but they’re very tight inside. Not roomy at all.
09/17, 5:51 PM
posted by:
Jordan
one day, hyundai is going to take over the world.
09/17, 6:11 PM
posted by:
beemerdude
A very large part of the appeal for luxury marques (MB-BMW-Lexus-Audi) is their long-term reliability (albeit with high maintenance and repair costs). Don’t you think its a bit early to predict how the Genesis is going to hold up?
Even their 1980’s Hyundai Excel made it through the first few months trouble-free before everything started to fail.
No, I don’t expect the Genesis to fall apart after a few months, but the truth is we don’t yet know what to expect. After all, it is an entirely new engine and platform that has yet to be proven in real world use.
09/18, 9:30 AM
posted by:
Lionwithoutpride
I have not seen a Genesis in person. I have never even ridden in a Hyundai (as far as I can remember). However, when I was 14 (about 11 years ago) a friend of mine took me to his parent’s house in D.C.. His ‘rents picked us up in their Mercedes wagon and I thought it was all that I had come to know and like about Mercedes. I had never ridden in a Lexus till that point. For the rest of the trip, my friend’s parents drove us around in their Lexus. I hated admitting it to myself, but I sat there thinking “dammit, this is as nice or nicer than their Mercedes!” The point of that lil’ vignette? For all any of of us knows, until we sit in the Genesis and start playing around with its gadgets, we will not know how nice it is. This sounds like it could be the car that starts a trend where Hyundai does to Lexus what Lexus did to Mercedes, BMW, Jaguar, etc. Of course, as has been noted, Hyundai will assuredly launch a separate brand for their luxury cars. I guess we will just have to wait and see.
09/18, 9:55 AM
posted by:
prowheels
I’m a bit surprised that Hyundai (and the press) would attempt to make this assessment with the Genesis sales and demographics at this point. The current market conditions are obviously pressuring buyers and would-be buyers into decisions they might not have previously considered. In other words, those premium buyers who are being forced to realign their finances are looking for solid values and are willing to accept the risk of a newcomer like the Genesis. And first-time luxury buyers aren’t buying this vehicle because they simply can’t afford to buy/trade right now! Not because they don’t find it appealing. The buyers stepping up from an Accord (or similar) are buying these cars because of the inherent value they represent. And I’m guessing if the economy was at a better place, they’d find the Genesis and Hyundai a solid alternative to the premium brand’s offerings. The fact that it’s selling at all in a recession is pretty impressive in itself. Like it or not, Hyundai is in the ballgame – and deservedly so.
09/18, 12:11 PM
posted by:
Tufast
I own a BMW 540i spt & have driven the Geneis (6cyl version). I can tell you the Genesis every bit as nice as my bimmer inside in out, performance is very good, but not quite the level of my car. If I were more luxury oriented & not so much sport enthused, I would definately consider a change. The coupe on the other hand is a different story, I’m already in line to buy one if it turns out to be as good on performance as the Genesis sedan is on luxury. For those of you that have not sat in a Genesis, don’t judge it, because you’ll be wrong. For those of you that would not even consider it because its a Hyundai, don’t bother sitting in one, because Hyundai doesn’t want your kind as a customer…Hyundai’s quality is as good, if not better than all other brands at this time, including Toyota/Lexus and if you don’t believe me take the time to research it your self. Keep kidding yourself into believing Hyundai isn’t up to par & the 5th largest auto manufacturer will soon become the #1 selling manufacturer while you’re not looking.
09/19, 12:22 AM
posted by:
jamesfabin
I currently drive a 2007 Lexus RX350 AWD, which replaced my Infiniti FX, which replaced my BMW Z4, which replaced my BMW 3-series. When looking at the non-luxury alternatives, I’ve never found anything that stands up to my expectations (in performance, ride quality, material quality, appearance). I will be turning in my RX lease soon and am proud to say I am considering the Hyundai Genesis V8. What has me considering it is the value (what it offers for the price), the appearance, the warranty, and the available options/features. I also am considering the CTS which offers a luxury brand with less features and shorter warranty, but there is the more aggressive appearance and the luxury badge.
Hyundai has come a long way and I would have no problem purchasing one. I hope Hyundai is following these blogs and taking note of the feedback others are leaving. Some things I would like to see improved on the Genesis that would make it the certain choice for me are: Give both front seats the cooling feature (not just the driver), make adaptive cruise control available (it was mentioned in the original press release, but I don’t see it on their website), offer a blind-spot monitoring/warning system, and offer a free loaner car for any service (including when I need an oil change). I don’t mind spending more for the technology – make it available. I see the Genesis as a great value and would want one with technology that is going to help me.
Good job Hyundai – the Genesis may be missing the originally targeted audience, but I’m the Luxury car owner who is considering getting more value for my money and thinking Genesis.
09/19, 6:28 AM
posted by:
Epik
That’s marketing and advertising for you. All those ads work and many times you won’t be free until you drop $80,000 on an AMG or 911 and realize a few months later it’s not at all like you’ve dreamed of your entire life.
I’ve took the V6 Genesis for a spin a couple weeks back and it’s a very solid car. I am not going to trade in my M3 for it but if I were in a 5 series or M5 I most certainly would. The Genesis might be lacking as a driver’s car but it excels in luxury features, safety, warranty, and value.
I think Hyundai should have used the Korean grill and badging. The Genesis wings emblem looks nicer on the front/back and steering wheel. I am clueless as to why they’ve kept those to the Korean/China markets.
The Genesis Coupe will be an even bigger success than the sedan in my opinion. The performance car crowd is a lot less hung up on brand than the yuppies.
11/09, 3:18 PM
posted by:
jackjimturkey
The Genesis is a respectable product.
Well done, Hyundai!
Don’t call BMW and Mercedes-Benz Genesis rivals just yet. L–s is a rival, albeit a poor one.
“start a luxury division in the same vein as Toyota’s L—s brand.” What is it, LLN — will hyundai start a luxury division, or go to the L—s route?
Lariat Luxury Locomotive Liner No.3: “it is a piece of crap.” I disagree.
inspire: Hyundai is not an unproven company
drchiem: Maxima, yes, “TL” no.
Need more oil for GM: “Americans would rather buy a Cadillac CTS than some POS Korean sh1tbox.” yeah, but I’d rather buy a CTS than just about anything. This car, is no excrement-box.
:tripleonefive: When a consumer is upgrading to a luxury vehicle, he wants a car from an established brand (Bimmer Benz Audi), not a Hyundai or a gussied-up CamCord.
dorikin_86: ”
I personally think the Hyundai is a terrific buy if it serves purely as luxury transportation…provided it proves to be reliable enough.” I agree.
beemerdude: don’t group Toyota’s faux-luxury division with (MB-BMW-Audi) .
11/25, 10:32 AM
posted by:
Sal Collaziano
I was very surprised to see how many people on http://genesisowners.com came from top tier luxury brands like Lexus, BMW and Infiniti.. So car, the Lexus GS, BMW 7-Series and Infiniti Q/M are losing the most sales due to the Genesis.. There are a few Cadillacs and Lincolns thrown in there – and the occasional Mercedes, believe it or not..
Sal C.