Genesis To Go Solo In The Market After Cutting Ties With Hyundai

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Hyundai’s premium brand Genesis is planning to break ties from the mothership, as far as the sales network and retail strategy.

The brand will announce a new retail strategy for the U.S. this month that will accelerate its separation from the Hyundai brand and will reduce the number of authorized dealerships significantly, AutoNews reports.

Originally this transition wasn’t supposed to happen until many years in the future and could prove to be an expensive problem for Hyundai and Genesis to solve. It also comes just after two years of the Genesis brand launch and one year after the sales launch of the G80 and G90 luxury sedans.

"We don't see a path forward without a good, strong dealer network that's also profitable," Genesis General Manager Erwin Raphael said. "And we sometimes have to make very difficult decisions in the short run in order to ensure that we take care of our ... dealers in the long run."

Genesis will have the framework ready by the middle of next year, with this strategy reset coming after Hyundai Motor America grounded all Genesis sales in Louisiana, following allegations from the state’s Motor Vehicle Commission that the automaker and the dealers lacked proper licenses to sell vehicles under the new brand.

Right now, Hyundai Motor America allows any of its 835 dealerships nationwide to sell the Genesis G80, also formerly known as the Hyundai Genesis. Out of those dealers, 352 also decided to offer the larger G90 flagship, which requires them to create a special showroom-within-a-showroom for the Genesis brand.

The original plan included the launch of Genesis-only stores in two to three years after the brand’s market launch last August. The updated plan moves the timetable forward by one to two years, focusing solely to separating the two brands, with the details still not have been announced.

Only solo Genesis dealers will be able to perform warranty repairs on Genesis models, unlike the previous plan that allowed them to do factory-paid warranty work on them. "For this brand to really survive and thrive, and for us to develop the culture within ourselves and within our dealer network to support and take care of these customers, we do in fact have to expedite our process of separating our brands," Raphael said.