Hyundai Mulling Options For A Standalone Luxury Brand

Hyundai’s record growth and sales increases have been fueled by a successful product line from the top down. But image is also a key part of the equation – luxury models like the Genesis and hype surrounding the Equus have helped Hyundai’s to vastly improve its brand brand perception.

Before these models were introduced, the question at Hyundai was if the company should introduce a new, standalone luxury brand.

For now at least, the decision has been to test the waters and sell these vehicles as Hyundais. But that doesn’t mean it will always be this way. The Wall Street Journal reports that Hyundai’s Chief Executive Officer John Krafcik is considering all options.

There are three ways forward, with the first being the current situation Hyundai has opted for, selling vehicles under the Hyundai name at all dealers. The second option is creating a smaller network of Genesis dealers with a dedicated showroom area.

The vehicles themselves would be Genesis-branded, without a Hyundai logo in sight. The third requires more investment still, with a completely separate line of standalone dealers. This is by far the most costly and would require higher brand sales volumes and prices to become feasible. However, if done right it is likely to be more profitable.

In our opinion the best option is the second one, and it is also the likeliest. The second option would enable existing Hyundai dealers to cater to Genesis customers, offering a luxury experience without all the added cost of a separate network. Existing Hyundai dealers have volume and capital to make the proper investment as well. In addition, the setup could result in even better service for customers – just look at the perks Hyundai offers to Equus owners.

If the plan works and the Genesis sub-brand becomes successful, from there the company could decide to make it become a full-fledged, standalone luxury brand. Until it becomes successful, the risky investment just isn’t worth it.

A wait and see approach seems to be the way forward at Hyundai for now. “One of the keys to this plan is how well the Equus does,” Mr. Krafcik said. “We don’t need to make a decision for some time” on the branding question.”

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