Exclusive: Genesis follows Apple into shopping centres

THE DELAYED re-launch of Genesis in Australia is poised to take an unexpected turn, with the Hyundai-owned luxury brand set to ditch conventional dealerships in favour of high-end retail ‘stores’ in the nation’s capital cities.

For the brand’s introduction to Australia in 2015, retail and aftersales operations were handled by Hyundai’s existing dealership network. But for its return as a standalone premium entity, the company is has taken matters into its own hands.

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High-end stores in Brisbane, Melbourne and Sydney will pioneer the return of Genesis. This entirely factory owned retail experience is a world first for Australia – even in Genesis’ native South Korea, the operation requires customers to visit a dealership.

Hyundai dealers will have no involvement with the Genesis brand when it reappears on the Australian automotive landscape in the fourth quarter of this year. It’s a decision that has caused “absolutely no dealer unrest” said Genesis Motors Australia general manager Peter Evans.

“The feedback initially was more of relief than about concern, because it reduces their sales pressure and stocking costs,” he said.

“There has been not one single complaint from any of our 28 dealers regarding not being part of Genesis’ future in the short term.”

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With just two models kicking off the relaunch – the G70 and G80 sedans – Evans explained that a radical restructure would have demanded too great an investment from its dealers without corresponding volumes, and was one of the reasons it had made the decision to fund the entire return itself.

“The dealer model for Genesis in its early days is not a viable business proposition (for dealers) because of the relatively low volumes and also the cost of the business model … is quite high.”

Beyond the initial sedan first fleet, two SUVs will join the line-up from 2020 with more models soon after. As volumes grow, dealers might once again be invited to join the by-then more lucrative and mature brand.

However, Evans said future dealer involvement would strictly be on the proviso that they could adhere to the standards it was in the process of instigating for the brand launch.

“As investment and the volume grows, it becomes a viable proposition to consider dealer involvement whatever shape or form that may take,” he said.

“If we ever signed up a dealer involvement again they would have to sign up to those stringent behavioural standards.”

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If successful , the three initial stores could be joined by others in the same cities or branch out to other capitals, depending on the demand hot-spots and reception.

Customer service is front and centre for the network of stores and Evans said the company would be implementing the “Apple model”.

“Our staff are measured and incentivised by the customer satisfaction levels, not by commission on selling cars.

“Part of our recruitment strategy is focusing on people with luxury sales experience, not necessarily cars. We can teach them the car side of the business but we can’t teach them to be naturally good with customers.”

Exact locations of the three stores are not confirmed but Evans said the outlets would be strategically placed to allow the company to “fish where the fish are” and located in “both indoor and outdoor malls” to capture passing interest and potential customers in a relaxed retail environment.

With the absence of dealerships, there will be three ‘channels’ for Genesis customers to engage with the brand.

Bricks and mortar stores will offer customers a location to contact the vehicles and Genesis staff in person. The business plan will also offer an ‘online channel’ for booking and managing purchases and service remotely. A third ‘home channel’ allows customers to test-drive or arrange a vehicle to be picked up for maintenance from home or the workplace.

When it comes to servicing, vehicles will be collected from the customer and taken to a third-party service centre equipped specifically for Genesis models where the work is completed before returning the vehicle to the customer’s most convenient location.

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“We want to turn the retail model upside down,” said Evans.

The first details of the reintroduction strategy have been a long time coming.

A local launch date was originally chalked for late 2017. The company passed on an opportunity to introduce models earlier this year, and that marker has since been pushed back to the latter part of 2018 with a new launch date provisionally locked but not yet publicised, said Evans.

Genesis isn’t the first brand to attempt to raise its premium profile by occupying standalone retail spaces. Tesla, Subaru, Infiniti and most recently Mercedes-Benz with its ‘Mercedes me’ lifestyle outlet have all done this with varying degrees of success.

Similarly, Alfa Romeo announced plans in 2017 to extract its brand from the multi-franchise spaces that also housed Fiat, Jeep and Dodge, as part of a strategy to highlight the brand equity and cache of the iconic Italian car maker, free of the less premium lines.

As a trading arm of Hyundai Motor Company Australia, Genesis Motors Australia exists in the same capacity as Lexus’ relationship to Toyota and Infiniti to its Nissan parent.