Genesis' delayed relaunch back on track with new crossovers, upcoming EV

LOS ANGELES — One year ago, Genesis was throwing a big party in Miami to show off its first crossover for the U.S. market, the GV80. The upstart Korean luxury brand was also previewing a Super Bowl ad featuring celebrity couple John Legend and Chrissy Teigen and targeting established brands with a new marketing theme, "Young Luxury."

Genesis and its new U.S. chief executive, Mark Del Rosso, had much to look forward to beyond the elegant midsize crossover and marketing push. A second crossover and a fully electric vehicle were deep in development, and the brand's existing three-sedan lineup was getting a heavy freshening to reflect a bolder design language.

But 2020 would have none of it.

While corporate siblings Hyundai and Kia were able to leverage inventory from their U.S. factories and South Korea to soften the national sales crash from the coronavirus pandemic, Genesis got stuck with dwindling supplies of existing products in a market that was turning even further against luxury sedans.

Now Genesis will try again to relaunch. And there is good news that bodes well for it: The GV80 finally arrived on dealership lots in December. The GV70 compact crossover is due midyear. The brand's still-secret EV should be unwrapped by year end. And the last of its sedan freshens, for the compact G70, is set for the first quarter.

"When the pandemic hit, there were some very dark days," said Peter Lanzavecchia, owner of Genesis of Cherry Hill in New Jersey and chairman of the national dealer council. "March and April, we were basically staring into the abyss. There were so many unknowns; we just went into survival mode."

The arrival of the GV80 and its platform mate, the second-generation G80 sedan, were delayed. Genesis dealers were not only denied their first crossover after years of waiting but also saw inventory for the outgoing G80 dwindle over the course of the year. Brand sales fell 23 percent in 2020 to just 16,384 vehicles — a number divided among 350 dealers.

Genesis is now promising a big comeback from that — and quickly.

Del Rosso, who was named CEO of Genesis Motors North America in October 2019 after working at Audi and Bentley, predicts sales will double this year compared with 2020.

"We're seeing a whole new customer base and audience that we haven't seen before with the GV80," Del Rosso told Automotive News last week. Trade-ins for the GV80 have come from Audi, BMW, Lexus, Mercedes and Rolls-Royce. Bystanders approach him on the street, Del Rosso said, to ask about the stylish new crossover he's driving.

Indeed, the brand's 2020 sales would have been even worse were it not for the late-year arrival of the GV80 and the new-gen G80 that reached dealerships last month. Genesis said sales of the GV80 hit 1,459 in December, which nearly matched the volume of the three sedans combined. The redesigned G80 notched 613 sales last month, the brand said, compared with just 55 in November as inventory fell to near zero.

Lanzavecchia, who is also co-owner of Burns Hyundai and Burns Buick-GMC, said Del Rosso's estimate for 2021 Genesis sales might be conservative.

"I think there is upside to that number, and here's why: We'll have a partial year of GV70 on top of the GV80 sales momentum, and we'll have a full year of the new G80 sedan rather than just a few weeks in 2020," he said in an interview last week. "I think there are many retailers that are goal setting to triple their Genesis sales in 2021."

Indeed, with Genesis dealers still operating out of Hyundai stores until standalone dealerships are built, juggling the expected volume gains for both brands could be complicated. Hyundai has a new electric crossover coming this year as part of its new Ioniq subbrand, along with the new Santa Cruz compact pickup.

"Quite frankly, it makes it challenging for the retailer," Lanzavecchia said. "Right now, we're finding so much interest and demand for both the G80 sedan and the GV80, it's stretching the capacity of many Genesis retailers who were just scaling up their exclusive Genesis staffing. It's a great problem to have."

And some good came from the challenge of the coronavirus sales experience, Del Rosso and Lanzavecchia agree.

Genesis was already fully engaged in valet maintenance service, with pickup and drop-off being used by 85 percent of its buyers. Dealers extended that concept to their sales process and learned lessons from it to address customers' demand for at-home services.

Lanzavecchia also gives Genesis credit for suspending its Keystone facility program for six months. The New Jersey dealer supports the program and is building a standalone store.

But the program remains controversial. Some dealers say that tying incentives compensation to store upgrades, especially given the brand's low volume, is coercive. The focus should remain on digital retailing, they say.

The new product wave is less divisive.

The redesigned G80 sedan and the new GV80 crossover were finalists for the 2021 North American Car, Truck and Utility Vehicle of the Year awards. The compact G70 won the car award in 2019. The G90 large sedan, before its freshening a year ago, was a finalist in 2017. The acclaim includes every Genesis product so far.

The young brand, which has struggled to gain a sales foothold during its first five years, is finally ready to take off, said Hyundai Motor America CEO Jose Muñoz, who is also global COO of Hyundai Motor Co. Genesis is part of Hyundai, while Kia is a separate unit.

"This is a pivotal moment in the history of Genesis," Muñoz said in a presentation this month. "For sure in 2021, Genesis is going to be on the radar and is going to be one of the fastest-growing luxury brands in America."

Muñoz, who joined Hyundai in May 2019 to deliver on its ambitious North American growth goals, said Genesis will be a key contributor to Hyundai's larger mission of reaching 1 million combined U.S. sales by 2025. Together, Hyundai and Genesis sold 638,653 vehicles last year and just over 710,000 in 2019.

But Hyundai's aspirations for Genesis go beyond volume, Muñoz said. As Hyundai's only luxury brand, Genesis is an important part of the automaker's effort to raise its reputation among consumers.

"Genesis is going to be, without a doubt, the biggest pillar of growth within the group," Muñoz said. "Genesis is going to be at the forefront of everything: in design, electrification, performance, quality, customer satisfaction, growth, profit. Everything."