How Hyundai’s Genesis plans to grow – quickly
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January 13, 2020 12:00 AM

How Hyundai’s Genesis plans to grow – quickly

Hans Greimel
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    HANS GREIMEL
    Lee: “In two years, we will have a very strong six-vehicle portfolio.”

    Editor's note: This article has been corrected to clarify Genesis' marketing centering around the 2019 Super Bowl.

    SEOUL — South Korean premium contender Genesis has sleek design, cutting-edge technology and accolades galore from auto buffs. What it lacks is a full lineup, brand recognition and, crucially, customers. But new global brand boss William Lee says that is about to change in a big way.

    The hard-charging Lee is rapidly rolling out a "3+2+1" strategy that will build a lineup of three sedans, two crossovers and one electric vehicle by the end of next year and, it is hoped, trigger a torrent of sales.

    Lee, a veteran of several overseas posts who just returned to Hyundai Motor Group's headquarters in Seoul after a stint with the carmaker in the U.S., isn't mincing words about what he has in store.

    "We call it a 'quantum jump,' " Lee, 60, told Automotive News here last month in his first interview since taking the helm of the Genesis division Nov. 1. "There is no reason we cannot grow significantly. In two years, we will have a very strong six-vehicle portfolio."

    Lee's game plan envisions a 30 percent surge in U.S. sales in 2020 and an even bigger increase in 2021. This year, he says, global sales will exceed 100,000 for the first time. They are forecast to climb to 116,000 from a target of less than 90,000 in 2019.

    The North American market accounts for about 30 percent of sales, while the home market of South Korea contributes the remaining 70 percent.

    But as Genesis plans to roll out into new markets such as China and Europe, the U.S. is key to its global success, Lee said. Why? If Genesis can make it there, it can make it anywhere.

    "Those sales will have a halo effect on other markets. Success in the U.S. market is critically important for us," he said. "My No. 1 goal is Genesis business acceleration."

    In outlining Genesis' growth strategy, Lee also said the brand will focus on building awareness, starting with an experience center in New York's trendy Meatpacking District. The facility, slated to open this spring, will have a showroom. But the focus will be as much on its Korean cuisine restaurant, library and event space for cultural events and exhibits as its vehicles.

    "We are going to show the heart and soul of the Genesis brand," Lee said.

    Sports car?

    Fleshing out the lineup is an important first step. And that is happening right now.

    The long-awaited GV80, Genesis' first crossover, goes on sale in South Korea this month and is expected to hit U.S. showrooms this summer, Lee said.

    Genesis unveiled teaser images of the production version this month, showing the premium brand's new design direction with high-tech quad lamps and an imposing Crest grille. The GV80 is based on a new rear-wheel-drive platform that will also underpin the redesigned G80 sedan, Lee added.

    The GV80 crossover will soon be followed by a smaller crossover, the GV70. That vehicle will arrive in South Korea by the end of 2020 and land stateside in early 2021, Lee said.

    By 2021, the GV70 will be the brand's top-selling nameplate, Lee predicted.

    Capping the build-out will be Genesis' first EV. It will skip hybrids and plunge straight into full electrics, Lee said. He added that the yet-to-be-named EV entry will likely be a crossover — and not a derivative of an existing model but a standalone vehicle on a dedicated EV platform.

    The EV will be offered both in the U.S. and South Korea, he said.

    Doing the math

    Genesis global head William Lee believes his 3+2+1 strategy will add up to 100,000-plus sales worldwide starting this year. The meaning behind the numbers:

    3 sedans: G70 compact and G80 and G90 midsize already on the market

    2 crossovers: GV80, on sale in South Korea this month and in the U.S. this summer, and the smaller GV70, due in South Korea by the end of 2020 and stateside in early 2021

    1 EV: A yet-to-be-named electric vehicle, likely a crossover

    Looking further into the future, Lee dangled the possibility of a sports line for the Genesis brand, something akin to the N series of sporty cars at its Hyundai mass-market sibling brand.

    "Eventually we need it, but it is too early," Lee said. "We are much more focused on the next two years as a strong foundation for further, continuous growth."

    By any measure, Genesis is riding full-steam momentum. With only a three-sedan lineup, U.S. sales more than doubled to 21,233 in 2019, largely on the back of the hot G70 sedan.

    Lanzavecchia: Five-year sales plan achievable

    At the same time, Genesis is riding tall on high praise for its product design and sterling quality. Genesis led J.D. Power's Initial Quality Study in 2018 and 2019. The G70 was named the 2019 North American Car of the Year and MotorTrend Car of the Year.

    Peter Lanzavecchia, owner of Genesis of Cherry Hill in New Jersey and a Genesis advisory board member, said the brand is at a key inflection point toward rapid growth and stellar customer satisfaction.

    Roller coaster ride
    Genesis hit a snag in 2018 as it worked out the kinks in its retail strategy. As the luxury brand adds models and sorts out its dealership network, it is back on the upswing. Global brand head William Lee is aiming for a 30% increase in U.S. sales this year and an even bigger increase in 2021.
      U.S. sales Change from previous year
    2016 6,948 —
    2017 20,594 196%
    2018 10,311 –50%
    2019 21,233 106%
    Source: Automotive News Data Center

    "We're treating a hundred thousand units a year as just the first milestone," Lanzavecchia told Automotive News. "We've got a five-year sales plan that is extremely achievable, especially with the introduction of our first crossover this year, our second crossover next year and three amazing sedans. We feel we've got an amazing commitment for future product and programs to support our sales efforts."

    He also praised management changes aimed at sharpening the brand's U.S. leadership.

    Dealer network

    Lee replaced Manfred Fitzgerald, who left Genesis after nearly four years at the top.

    He takes over at a critical time for Genesis as it builds out its U.S. and Canada sales network, debuts its first crossovers and eyes expansion into new markets, including possibly China and Europe. Still to be realized is the creation of a standalone sales channel in the U.S.

    But Lee will also need to create a higher profile for Genesis, which was carved out of the Hyundai marque in 2015. Despite positive reviews from car buffs, Genesis still has lower U.S. market share than the likes of Jaguar, Mini and Porsche.

    "We are doing a lot to increase Genesis brand awareness, opinion and consideration," Lee said.

    In 2020, it will continue sponsoring the Genesis Invitational PGA golf tournament. And Lee said Genesis also plans Super Bowl "activities like last year." Centered around the 2019 game, Genesis, as the official luxury vehicle of the National Football League, conducted various marketing campaigns in the host city Atlanta, including vehicle displays and test drives.

    Strengthening the U.S. retail network is another piece of the puzzle. About 350 dealers have signed sales and service contracts with Genesis, and Lee said that number doesn't need to change.

    But the looming challenge is getting them to set up a standalone network of Genesis stores.

    In the early days, Hyundai dealerships could sell Genesis products, but in an effort to give the Genesis brand more luxury cachet, Genesis is requiring standalone stores. The separation begins this year, but it will take years to establish a completely independent channel, Lee said.

    "They are ready and willing to invest more," he said. "And based on this strong portfolio, I am sure our dealers in the USA will make huge growth in sales."

    The first independent store should open at the end of 2020 or in early 2021, Lee predicted, adding: "We don't want to be slow, but we don't want to be too fast."

    New North American management has been tasked with making it happen.

    Hyundai hired Jose Muñoz last year as its new global COO and North American boss after he left Japanese rival Nissan Motor Co. And in October, Muñoz named former Audi of America head Mark Del Rosso as the Genesis brand's new CEO for North America, reporting to Muñoz and Lee.

    "We have all the necessary resources to grow," Lee said. This year "is about momentum to build up Genesis, from a volume perspective and also from a brand perspective."

    Laurence Iliff contributed to this report.

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