Genesis dealers now opening dedicated stores

After six years of selling vehicles out of Hyundai dealerships, the growing import luxury brand Genesis is now opening standalone retail stores in the U.S.

Its first opened last week in Lafayette, La., and dealers have more than 20 others in planning or construction stages across the country.

A Genesis store in Cherry Hill, N.J., owned by Peter Lanzavecchia, the head of Genesis' retail advisory board, will open by the end of the year.

Others in planning phases include a dealership in Greer, S.C., not far from BMW's big U.S. manufacturing complex, and two in greater Los Angeles in the Cerritos and Corona markets.

A Santa Monica location — operated by Mike Sullivan, who owns the LAcarGuy dealership group — is already selling Genesis vehicles, but in an interim facility while the permanent structure is being built to open by year end. Sullivan is the only non-Hyundai dealer in the process of opening a standalone Genesis dealership.

The construction wave represents the next step for the Korean luxury brand as it distances itself from the mass-market make that launched it, Hyundai.

"Creating a space to showcase the Genesis lineup will help us to not only elevate the brand in our immediate area, but also across the region," said Arthur LeBlanc Jr., dealer principal of the first completed store, Genesis of Lafayette.

Like his fellow Genesis retailers, LeBlanc has taken his time to open a dedicated store.

LeBlanc was awarded a Genesis franchise in January 2018 but didn't start preliminary planning until August 2020. He said he began building in March 2021.

"It's hard for dealers to justify the investment when they are only selling about 100 cars per year," said Sam Abuelsamid, principal research analyst at Guidehouse Insights. Abuelsamid estimated that investment in dealerships can cost as much as $5 million when the service department is factored in.

Location also is a consideration.

"A premium brand like Genesis wants to be in upscale urban areas where real estate costs will be higher," Abuelsamid said.

But the Genesis brand and its budding lineup finally warrants the investment.

"Genesis has earned a position as a standalone brand," LeBlanc said. "As a luxury vehicle manufacturer, a standalone facility is not only needed but also expected from our consumers."

The first two products Genesis debuted — the Genesis midsize sedan and Equus large sedan — originally wore the Hyundai badge. Hyundai Motor Group decided globally that it would spin off the Genesis name as its own marque at the end of 2015, according to Genesis spokesman Jarred Pellat.

The Hyundai Genesis became the G80 midsize sedan, and the Equus became the flagship G90. Genesis survived on those two models until the G70 sport sedan debuted for the 2019 model year.

Pellat said Genesis has been focused on establishing itself rather than building dealerships until now.

"We were in a brand-building phase, and it was difficult to ask dealership partners to build the facilities without the product," he said.

A lack of product coupled with a slow-selling G90 also likely contributed to hesitation from dealers, Abuelsamid said. But the brand now includes a pair of utilities. The GV80 midsize crossover and GV70 compact crossover launched within the past two years and have boosted recent sales.

Genesis sold 49,621 vehicles in the U.S. during 2021 — triple its 2020 results.

"SUVs and crossovers have more demand and are significantly higher volume compared with sedans," Abuelsamid said.

It makes much more sense to have standalone stores now that Genesis has the GV70 and GV80, especially with the upcoming GV60 dedicated electric crossover, he said. Following the GV60, Genesis will debut electric versions of its G80 and GV70.

"Having a premium EV in the market is going to be a big help," Abuelsamid said.