Genesis Overhauling U.S. Network, Will Cut Dealers In Half

Hyundai is shaking up its Genesis luxury brand in the United States with an overhaul of its dealership network.

Starting from the 2019 model year, Hyundai will introduce new agreements to its current franchise holders, which are expected to slash the number of locations where Genesis models are sold by more than half.

The South Korean automaker hopes to improve brand awareness, offer a better customer experience to Genesis customers, distance the automaker from Hyundai and improve profit margins with these new measures, Wards Auto reports.

To cull the number of dealerships selling Genesis models, Hyundai will offer dealers new franchise agreements that allow them to either sign a new deal to keep selling Genesis or to take a cash buyout based on their past sales performance. The car manufacturer currently has 850 locations in the United States licensed to sell Genesis, but expects that number to drop to roughly 400.

Steering buyers away from BMW and Mercedes isn’t easy.

Hyundai’s decision comes on the back of poor Genesis sales throughout 2018. Deliveries fell drastically when Genesis imports were halted in March to clear inventories. According to Genesis executive director Erwin Raphael, there is now a less-than-30-day supply of models. In the first eight months of the year, Genesis sold 8480 vehicles, or 36.4 per cent less than the same period in 2017.

Ideally, the company wants all of its franchises in the United States to establish dedicated Genesis showrooms separate from their Hyundai sales areas. However, Raphael admits that not all franchises will make the investment.

Despite the recent sales decline, Genesis is remaining committed to the United States and, in the next three years, will introduce two SUVs and a sports coupe to sit alongside the current G70, G80 and G90 sedans.

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  • Craig

    There is often a flurry of interest in something new that results in sales that die down a bit after that new-ness wanes. And that’s just how it goes. Genesis is doing just fine. I’m looking forward to what they have planned next.

    • Merc1

      How in the world can they be doing just fine when their sales are so terrible that they had to halt deliveries to clear out cars that were just sitting around? Sales die down a bit? Totally delusional outlook.

      M

      • Jason Miller

        The G70 will change this. Bank on it.

        • brn

          We were supposed to bank on the Genesis Coupe too. After the hype wore down, everyone realized it wasn’t that special.

          Hype is their problem. If they set realistic expectations, people wouldn’t be so disappointed.

          • Merc1

            Correct. Hype and no product, i.e. SUVs. They won’t get any until 2020. At the time when the brand was conceived, cars were the focus so now they’re caught with no SUVs as that change happened after they put their plan in motion.

            M

          • Galaxium

            That’s an unfair thing to say.

            If Genesis came out as a brand with SUVs, people would have dismissed the brand as another unimportant SUV-maker.

            There are spyshots of the next-gen GV80, which will compete with the X5 and GLE, so just wait for that.

          • bd0007

            The Genesis coupe was never a real Genesis product – it was kinda a tweener.

        • Merc1

          A sedan, I seriously doubt it.

          M

          • Jason Miller

            I’ll see you in a year so I can show you how wrong you are.

          • brn

            Need at least two years for the hype to die down, but it’s a date!

      • Dude

        If you bothered to look at the actual numbers the G90 and G80 only outsold by their MB and Lexus competitors. They outsell almost everyone else in their segments from what I can find (info from carsalesbase. My comment with the link is current “waiting for approval”)

  • TheBelltower

    This is a smart move. Cadillac should have done this.

  • THE WHOLE GENESIS IDEA SOUNDS HALF BAKED.

  • Jerry Hightower

    Consumer Reports just recently named the genesis the best car out there.

  • Karl

    An SUV less lineup is the culprit here,things should improve with introduction of the upcoming SUV.. Tiny steps will have to do for now..

  • Kevin

    Makes sense business wise…but what would make even more sense is if thhey had an SUV!!! Lol yeah i know they are developing them atm i just want one NOW!!! Korea numba one!

  • charlotteharry57

    Hyundai is not handling the Genesis brand well. It needs to establish TOTALLY SEPARATE showrooms, AT A DIFFERENT LOCATION, as is the case with Lexus, Acura, et al. If Hyundai is not willing to do that, then scrap the whole friggin idea. The separate, but on-site, model is not causing Lincoln sales to do very well, either.

    • Liam Paul

      when is the last time you can remember seeing an acura . I wouldnt use them as a business model

      • charlotteharry57

        5 folks on my street have one. MDXs, an RDX and a TLX. They’re popular in hoity-toity parts with upscale, die-hard Hondaphiles.

  • Honda NSX-R

    When the hell is the G70 going on sale in the US? I thought it was supposed to come in the spring, but now it’s fall and I still don’t know what the pricing is supposed to be like. This delaying is what made me get another car instead.

  • Stephen Santa Ana

    Never have so many waited so long for so little. Remember, they originally promised the G70 in “early 2018”. Oops! Make that Spring. Early Summer. July. August for sure! We really, really mean it! Middle of September and nothing. I’ve owned a few Hyundais and two Hyundai Genesis Sedans. Very nice products. They’ve squandered any warm feelings I’ve had for them. If they don’t know how to sell cars, they shouldn’t even try. What a bunch of amateurs. I’ll bet the G70 is very nice. But I don’t trust them.

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