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Hyundai Makes U-Turn on Genesis Retail Network

Last week, Genesis General Manager Erwin Raphael assured Hyundai's dealer council that the opportunity to sell the brand would now be offered to all Hyundai dealers in the United States, in what appears to be a reversal.

AFP Relaxnews

Updated:May 3, 2018, 8:46 AM IST
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Hyundai Makes U-Turn on Genesis Retail Network
2018 Genesis G90. (Image: AFP Relaxnews)
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Hyundai has just changed its mind about who will be retailing its Genesis luxury offshoot brand – again. Depending on your point of view, a business making a U-turn on a major policy can either be seen as a sign of a company ready to adjust to a quick-moving market, or as a signal that it's not entirely clear about its approach. It remains to be seen which applies to the South Korean brand.

As recently as January it was announced Genesis would be launching an entirely separate retail network made up of around a hundred retail stores in 48 different markets, and these sites would be concentrated in urban areas thought to be particularly friendly to a luxury brand. In the chosen markets, Hyundai's elite-level dealers would be given the first opportunity to acquire a Genesis franchise. This would have inevitably resulted in the vast majority of Hyundai dealers losing their right to supply Genesis product as they wouldn't be invited to join the proposed new network.



Last week however, Genesis General Manager Erwin Raphael assured Hyundai's dealer council that the opportunity to sell the brand would now be offered to all Hyundai dealers in the United States, in what appears to be a reversal.

This shift in policy doesn't mean that all Hyundai dealers will be able to sell Genesis models by any means though. Genesis is no longer confining itself to the 48-market plan, and a spokesman for the company also admitted the Genesis network may be made up of more than the originally planned 100 stores. It now appears all Hyundai dealerships will be able to apply to become Genesis dealerships.

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Any Hyundai dealers who remain or now become Genesis dealers will have to agree to and sign new or separate franchise agreements. What does remain of the previous plan is that all Genesis dealers will have to have retail and service facilities separate to those for Hyundai.

It's certainly not uncommon for manufacturers to do this sort of thing. Ford only allows certain selected European dealers to sell the Mustang since its introduction in 2016 who have separate showrooms.

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Hyundai obviously wants to differentiate its luxury Genesis brand from its mass-market Hyundai models by not allowing them to be sold alongside each other in the same facility. But going too far risks a lack of exposure for its new models, which don't currently have the prestige of rival brands such as Lexus, BMW and Mercedes.

In Europe, Genesis is still a model sold by dealers as part of the Hyundai brand. As sales have been modest, it remains to be seen if Genesis is ever launched as a separate brand in Europe.
| Edited by: Ayushmann Chawla
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