Hyundai Aiming Genesis Straight at Germans
To attract more premium buyers, including those driving an A6, 5-Series or E-Class, Hyundai plans to pitch the Genesis as “valuable” rather than it being a good “value.”
May 5, 2014
PARADISE VALLEY, AZ – Hyundai wants to sell 24,000 copies of its new second-generation Genesis sedan per year, up from less than 20,000 deliveries last year.
Where will it net 4,000 more buyers? If the automaker has its way, from among those who have an Audi, BMW or Mercedes parked in the garage.
"We're going to go after the German (mid-large) sedans – we think we can do that (with the new Genesis),” Hyundai Motor America CEO Dave Zuchowski says here at a recent event.
With the first-generation model, 55% of sales were conquest, or from non-Hyundai owners. That’s a good rate for any automaker, but Hyundai points out only 15% of those 55% traded in a luxury car for an ’08-’14 Genesis sedan.
To attract more premium buyers, including those driving an A6, 5-Series or E-Class, Hyundai plans to pitch the Genesis as “valuable” rather than a good “value.”
The “valuable” positioning is supported by the car’s attributes, features and design, Zuchowski says.
“We think it’s overall a world-class experience,” he says of the Genesis, which for ’15 gets a thorough exterior redesign and adds better interior materials and scads of technology, much of it standard. The list includes an automatically opening trunk, navigation system and a proximity key with push-button start.
Demographically and psychographically, the automaker is targeting consumers who have a high income but aren’t rich yet, or HENRYs.
The average HENRY is seen being between 38 and 55, younger than the 65-plus-year-old average buyer of the outgoing Genesis.
HENRYs are likely to be married with kids at home and actively employed, as a mid- to senior-level manager, a contrast from the retired empty-nesters who largely purchased the first-gen 4-door.
Unlike the previous buyers, HENRYs are motivated more by the car’s design, safety/quality and reliability than comfort, dependability and roominess factors, Hyundai claims.
The next crop of Genesis owners are seen sharing one trait with first-gen purchasers in that they are less interested in buying a car as a status symbol but rather because it performs to their liking.
While it won’t be a core message, the Genesis as a good value will continue to be highlighted by the automaker.
“When you look at our competitors in that segment, everybody else is starting in the mid-$40s and (pricing) goes quickly up to over $50,000,” Zuchowski says. “The difference between a comparably equipped Lexus GS or Mercedes E-Class is in the $12,000-$17,000 range. So it’s just a tremendous value, and we feel really good about where we’re positioning the vehicle.”
The base ’15 Genesis model, with a 3.8L gasoline-direct-injected V-6 and rear-wheel drive, begins at $38,000, up from $35,200 for ’14.
All-wheel drive is new for ’15 on the V-6 grade and boosts the base model’s price to $40,500.
The Genesis with a 5.0L GDI V-8 is $51,500 for ’15, up from $47,400 in ’14.
Zuchowski says a fully loaded ’15 Genesis will top out at $55,000.
While Hyundai wants to woo German luxury buyers, it has a long way to go before it matches the volume of some competing models from Deutschland.
Hyundai says Genesis sedan sales accounted for 19,804 of the total 32,330 Genesis deliveries in 2013 in the U.S.
Last year Mercedes’ E-Class racked up 69,803 sales and the BMW 5-Series 56,863.
Hyundai did come close to matching the Audi A6’s 20,503 units total in 2013, and surpassed several non-German competitors, including the Lexus GS (19,742) and Cadillac CTS (7,933).
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