Hyundai: Genesis Can Make Money at Sub-100,000 Sales
The nascent Korean luxury brand initially is aiming for Tier 3 luxury, by volume anyway, and sees conquesting Japanese luxury owners as possible.
August 12, 2016
VANCOUVER, BC, Canada – Hyundai’s new Genesis luxury brand can make money with lower volumes.
And that’s a good thing, because it isn’t looking to compete with the big boys of luxury just yet, says Hyundai’s U.S. chief.
“If we’re extremely successful in the next 5-year period of time, we’ll go from selling 30,000 Genesis (vehicles) to maybe 90,000. We’re structured to make money and generate growth at sub-100,000 (annual volume),” Dave Zuchowski, CEO-Hyundai Motor America, tells media here at a ’17 Genesis G90 preview.
While Hyundai and the team behind the new stand-alone Genesis brand is aggressive and hopeful about their prospects in a crowded and competitive luxury sector, both in the U.S. and in select global markets, Zuchowski is realistic, too.
“It’s very difficult to take volume from Mercedes and BMW,” he tells media. “They’re great products, they’re well-established and have very, very loyal owners.”
He sees more promise in conquesting Japanese luxury-vehicle buyers, as well as moving Hyundai owners up and attracting owners of other volume-brand vehicles.
Breaking down the luxury hierarchy, he puts Mercedes and BMW in the Tier 1 category, as they sell more than 300,000 units annually in the U.S. In the Tier 2 category he places 100,000-plus sellers such as Cadillac and Audi.
There’s no word on whether winning over Japanese luxury owners includes Lexus as much as it does Acura and Infiniti.
The latter two brands, by Honda and Nissan, respectively, have struggled compared with Toyota’s Lexus to gain higher volume and prestige.
Zuchowski does say Hyundai studied Lexus closely in planning its Genesis launch and even snagged a few of its U.S.-based executives for the new luxury brand’s team..
On pricing, Genesis models, including the G80 mid-luxury sedan already at U.S. Hyundai dealers, will be great value propositions, with Zuchowski noting Lexus arrived in the market priced lower than the Germans.
However, he says the G90 large luxury sedan will be slightly more expensive than the outgoing Hyundai Equus due to a variety of complimentary convenience services. Genesis will offer spiffs, including three years of valet service that will pick up the car from its owner and deliver it to a dealership for maintenance.
The Genesis G90, with features such as a 22-way power driver’s seat, smart blindspot detection and 3.3L twin-turbo V-6, is set to go on sale next month in the U.S.
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