Automotive News Canada - September 2016 - V2 - 6


6

* SEPTEMBER 2016

One of the reasons for bringing
cars to potential customers is that
Hyundai sales staff are not used to
dealing with high-end clients who
come through the door.
3+272 +<81'$,

GENESIS FOR CANADA
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Dealers will take Genesis cars
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the same place that also leases
Accents for "$39 per week"
BY JEREMY SINEK

THE ROLLOUT
Q

Brand launches in Canada this fall

Q

Initial lineup is two low-volume sedans

Q

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instead of bricks-and-mortar stores

Q

Six-model lineup will complete
roll-out over next five years

Q

Stand-alone Genesis stores in five years
when full lineup is available

Q

Eventually Genesis wants about 33
stores in Canada

TORONTO CORRESPONDENT

HYUNDAI IS FINALLY LAUNCHING
its long-awaited luxury brand, Genesis.
That's news.
Bigger news still is the way Genesis
plans to begin retailing its cars in
Canada; with no separate Genesis dealers, and no Genesis cars in Hyundai dealerships either.
Genesis Motors Canada plans "a
hybrid between leveraging our current
dealer body and having a program where
the OEM sells direct," says Michael
Ricciuto, director of the Genesis Brand
and Corporate Strategy.
Under the umbrella "Genesis at

Home," sales staff will bring demo cars
to prospective customers' homes or
workplaces. Customers will be able to
complete the transaction online. And
after the sale, cars will be picked up for
service and returned to the customer on

a similar concierge basis. The plan also
envisages boutique showrooms in select
malls and downtown locations.

PORTFOLIO SMALL TO START
Here's the reasoning: Genesis's
launch lineup - one midsize sedan
and one large one - is too small and
too low-volume to justify its own dealer network right now. The stand-alone
Genesis stores will come about five
years down the road. By that time, the
product portfolio will include compact
and midsize CUVs plus a compact sedan
(a la BMW 3 series) and coupe. The
greater sales volume should make the
investment viable for the select Hyundai
dealers eligible for the franchise.
Meanwhile, the automaker recognises that prospects who could afford a
Mercedes S class or BMW 7 series will
balk at shopping in "lease-an-Accent-for$39-per-week" Hyundai stores; Hyundai
sales staff are not used to handling those
high-end customers.
In the United States, franchise laws
mean the cars will still have to be carried and sold by Hyundai dealers, but
American Hyundai will apply the concierge/on-line concept as much as possible to ensure prospects need never visit
a physical Hyundai store ... if they don't
want to.

INCENTIVES TO SELL

Genesis sales staff will bring demo cars to prospective customers, who will
then be able to complete the transaction on-line.  3 + 2 7 2  + < 8 1 ' $ , 

Different laws in Canada let Genesis
take that a step further. Genesis Motors
Canada will hold the inventory, and customers will ultimately make their purchase from the OEM; the dealers' role
will be to interface with customers as
Genesis Canada's agents: "We'll be compensating our dealers very well so they
can focus on literally selling the product, the features and the brand," says
Ricciuto.
A key element in that process will be
fixed, no-haggle, all-inclusive pricing.
The larger G90 will be sold in just two
models distinguished by their engines:
turbocharged V-6 or non-turbo V-8. Both
models will be loaded, with no options
available. The all-inclusive price will
even include destination, administration
fees, etc.

As of this writing, Genesis was just
beginning private conversations with
potential partner dealers. None of the
dealers interviewed by Automotive News
Canada had yet been approached, and
without knowing any details, they were
reluctant to comment.

NEW APPROACH
"It's new ground for everybody and
I don't even have an opinion because
I don't know how it will work or how
clients will respond to it," said Robert
Attrell of Attrell Hyundai in Brampton,
Ont. "We've never marketed cars like
this before."

We'll be compensating our dealers
very well so they can focus
on literally selling the product...
and the brand.
MICHAEL RICCIUTO

Director of the Genesis Brand
and Corporate Strategy

Michael Hatch, chief economist
for Canadian Automobile Dealers
Association (CADA), doesn't see any
red flags raised by Hyundai's proposal.
"We'll see how it goes," he said. "It's an
interesting experiment."
Hatch added that people have been
predicting the end of bricks-and-mortar
dealerships since the early days of the
internet. But although online retailing
has become widespread in many other
products, "When it comes to vehicles, so
far we have been able to buck that trend.
A car is a very infrequent and significant
purchase, and people still want to visit a
dealership and kick the tires."
Eventually, Genesis buyers will be
able to do that. The brand plans to have
33 bricks-and-mortar stores of its own in
five years' time. - ANC



Table of Contents for the Digital Edition of Automotive News Canada - September 2016 - V2

Automotive News Canada - September 2016 - V2 - Intro
Automotive News Canada - September 2016 - V2 - 1
Automotive News Canada - September 2016 - V2 - 2
Automotive News Canada - September 2016 - V2 - 3
Automotive News Canada - September 2016 - V2 - 4
Automotive News Canada - September 2016 - V2 - 5
Automotive News Canada - September 2016 - V2 - 6
Automotive News Canada - September 2016 - V2 - 7
Automotive News Canada - September 2016 - V2 - 8
Automotive News Canada - September 2016 - V2 - 9
Automotive News Canada - September 2016 - V2 - 10
Automotive News Canada - September 2016 - V2 - 11
Automotive News Canada - September 2016 - V2 - 12
Automotive News Canada - September 2016 - V2 - 13
Automotive News Canada - September 2016 - V2 - 14
Automotive News Canada - September 2016 - V2 - 15
Automotive News Canada - September 2016 - V2 - 16
Automotive News Canada - September 2016 - V2 - 17
Automotive News Canada - September 2016 - V2 - 18
Automotive News Canada - September 2016 - V2 - 19
Automotive News Canada - September 2016 - V2 - 20
Automotive News Canada - September 2016 - V2 - 21
Automotive News Canada - September 2016 - V2 - 22
Automotive News Canada - September 2016 - V2 - 23
Automotive News Canada - September 2016 - V2 - 24
Automotive News Canada - September 2016 - V2 - 25
Automotive News Canada - September 2016 - V2 - 26
Automotive News Canada - September 2016 - V2 - 27
Automotive News Canada - September 2016 - V2 - 28
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