After two years on the market, most vehicles start to lose their luster. But Hyundai Motor America says the positive glow from the launch of the Genesis sedan and coupe still burns bright.
The near-luxury Genesis sedan brought kudos to Hyundai, winning the coveted North American Car of the Year honor and other awards in 2009. And the more performance-oriented Genesis coupe, which debuted in mid 2009, has won over enthusiasts.
“Genesis helped the Hyundai brand from a halo perspective,” HMA President and CEO John Krafcik tells Ward’s. “It did its job very, very well. It gave us more credibility when we launched cars like the Sonata and the Tucson.
“Now the success of those cars is kind of reflecting back positively on Genesis, because we haven’t been spending a lot of marketing dollars on it.”
While Hyundai has reduced its advertising spending significantly from the $80 million doled out in Genesis’ launch year, the nameplate continues to rack up positive data points.
Proof of the car’s strength is its 16 consecutive monthly year-over-year sales increases, Krafcik says.
“Every time we’ve had a year-over-year comparison, we’ve done better, which is hard to do, especially in segments like this one,” he says.
Genesis sales jumped 49.5% in October, alone, compared with year-ago.
While it doesn’t generate as much ink, the Genesis coupe had a record month in September, Krafcik points out, and it controls a 5%-6% retail share in a segment that includes such formidable competitors as the Chevy Camaro, Ford Mustang and Dodge Challenger.
Krafcik also touts the Genesis sedan’s higher residual values compared with German competitors.
“Its residual values are stronger now, which is amazing. That never happens,” he says. “Nobody believes this…(but) we have higher residual values now than the brand-new BMW 5-Series (and) Mercedes-Benz E-Class.”
Automotive Lease Guide, which projects residual values, says the V-8 Genesis sedan should retain 36% of its purchase price after five years, compared with 34% for both the BMW 550i and Mercedes E550 Sport. The V-8 Genesis also is forecast to outdo those competitors after four years.
However, residual values of the V-6 Genesis, while matching the E350 after five years, don’t compare as favorably to similarly equipped 5-Series and E-Class models at the 36- and 48-month ownership marks. And in absolute dollars, the pricier German cars are worth more in subsequent years than the less-expensive Genesis, ALG says.
Krafcik notes the Genesis sedan controls a high share of its retail segment, at 6%-7%, trailing “only the Lexus ES, 5-Series and E-Class.” But he acknowledges sales are lower than Hyundai originally anticipated.
The auto maker said in 2008 it expected to sell 40,000-50,000 Genesis models annually, split evenly between sedan and coupe variants. While the mix is as predicted, Genesis sales in 2009 totaled just 21,889 units, Ward’s data shows.
Krafcik says the 50,000 estimate was based on a higher industry volume of 15 million-16 million light vehicles in 2010. Last month, the U.S. seasonally adjusted annual rate reached a 2010 high of 12.2 million, but the year-to-date SAAR is up only 0.7% from year-ago, to 11.4 million.
However, the Genesis is bucking the overall industry trend, with sales rising 33.2% through October from year-ago to 23,694 units.
