- Genesis vehicles are priced-fixed and available for purchase online only.
- Genesis Canada holds inventory as there are no selling-dealers.
- For test drives, Genesis will bring the cars to you.
All of this is very complex, and not at the same time. And this is perhaps why I find many of Genesis’ ideas, none of them new mind you, to lack long-term vision, and feasibility. Truth be told, with the three sedans, hand delivering new cars and a concierge service called “Genesis at Home” with a courtesy vehicle were all possible and sustainable for years to come. The new Genesis GV80 may change all of this.
How will this utopic way of doing business change? In Genesis’ own words, the GV80 SUV doubles the company’s market potential, sales volume and visibility. In 2019, Genesis Canada delivered 1,525 news cars in (1,119 G70 (up), 324 G80 (down) and 82 G90 (down)) which means that in its first full year of availability, the GV80 might increase total sales to well over 3,000 units.
Genesis may outgrow its britches fast
The first Genesis SUV lands this summer so real full-year numbers will only be available in early 2022. In the meantime however, Genesis will be able to gauge interest and I think they’ll need to make many adjustments to their existing game plans.
In my opinion, the new 2021 Genesis GV80 will certainly hurt G80 sedan sales, barely affect G90 deliveries (they will stay flat or nearly) and possibly negatively affect the current star at Genesis, the G70. The GV80 will combine what we think will be a pleasant driving experience with versatility and a heightened level of technology and features over the G70. Keep in mind that an AWD G70 starts at $47,000 with the 4-cylinder and $56,000 for AWD and the V6 – this is more or less our projected starting price for the GV80.
The Genesis SUV’s potential is, in a word, tremendous. And let’s not forget that a compact GV70 SUV is expected to break cover before then end of 2020…
Ideal ownership experience for few, not many
Now, although Genesis Canada has brokered deals with various Hyundai dealers across the country and established three boutiques so far, I doubt that these “contact points” will be able to manage massive logistical increases in demand for services. Delivering test cars, retrieving ones in need of service in exchange for a courtesy vehicle and more may turn into something of a nightmare. This especially plausible because inventory is centralized and not at the authorized retailers.
It’s easy to speculate here that potential Genesis Canada customers prefer not to head over to Hyundai dealers make purchases anyhow – this is why the entire purchase/lease process can be done online and the 23 authorized Hyundai dealers in Canada don’t need to keep stock. In a few ways, the Tesla model is similar but Tesla and Genesis cannot be compared in brand- and product-awareness. In many ways, there’s only one Tesla, and, as a compliment, there are many Genesis (Audi, BMW, Mercedes-Benz, Lexus and so on).
Pricing and trade-ins
Finally, Genesis vehicle prices are fixed. As you may remember, car companies such as Toyota and Saturn have attempted to set pricing arguing that everyone pays the same fair price. As you surely know, Toyota quickly dropped this practice and Saturn simply went away. The issue here is not Genesis, but the Audi, BMW, Mercedes-Benz and Lexus dealers across the street which are ready and willing to wheel and deal – consumers will always want to feel like they’re on top of the transaction and being told what they will pay takes control away.
Relatedly, there are trade-in values which can vary wildly and this, despite Genesis Canada stating that their strategy on this point will be to use the Canadian Black Book, which many other brands/dealers already use. This is one hot potato on its own as it might turn into a multiple-step process.
Genesis is on the way up
Genesis is gaining consumer acceptance but it is fickle. Even if their Audacious, Progressive, Distinctly Korean philosophy does engender superior products, consumers will have the final word. Not only that but the “others” won’t easily give up their market shares. Once they’re done ignoring Genesis, they will use price-fixing and the Hyundai dealer network as arguments against them.
In the meantime, the GV80 is currently available for pre-order in Canada (and the US) and for those early adopters, Genesis is saying thank you with an appealing 2.9% rate (maximum 60-month lease / 84 month finance.) So far, Genesis Canada won’t say how many pre-orders they’ve received but did mention that the number is significantly higher than the 200 pre-orders than the G70 got.
Going forward from today, we will all get so see much more Genesis. They have a cool Super Bowl commercial which features Chrissy Teigen and John Legend, they’ll be at the the 2020 Genesis Invitational at Riviera Country Club (so will Tiger Woods) and only a few weeks later, the GV80 will make its Canadian debut at the Toronto Auto Show. Following that, look for the GV70 later this year and an electric SUV in 2021.