Automotive News Canada - July 2017 - 13

* JULY 2017

Genesis: It's 'real'

Canadian customers praise at-home sales experience,
but traditionalists will have 31 Genesis locations to visit by 2021
they focus on the customer
experience, because they're not
focused on negotiating price or
the box [package]."
Brian Nash, of Stoney
Creek, Ont., said he was initially skeptical of the "no-dealership thing" when he bought
his 2017 G80 Ultimate.
"I'm old school, go to the
dealership, kick tires," he said.
"I looked at Mercedes, Audi,
Lexus, Jaguar, and I went
for the G80 because it offered
everything I wanted.

By JIL MCINTOSH
TORONTO CORRESPONDENT

HYUNDAI'S STRATEGY TO
launch the Genesis luxury
brand without a national network of bricks-and-mortar
stores is winning over customers.
After initially launching
Genesis as a single Hyundai
luxury sedan, the company
has reimagined Genesis as a
brand unto itself with several
luxury vehicles and an entirely new concept for administering sales.
Rather than using franchised dealers, Genesis owns
its inventory and retails
through online sales and
agents. While Genesis recently opened its first physical
store in Toronto, the brand
primarily uses a concierge
service: Agents bring the
cars to the customers for test
drives, they deliver the cars
upon sale and pick up and
leave a loaner when a car
needs service.
Genesis began selling cars
online in Canada Nov. 21,
2016, and as of June 30, 2017,
311 vehicles have been bought.
"We purposely set up
Genesis so [customers] buy
directly from Genesis Motors,"
said Michael Ricciuto, Genesis
brand director, in an interview
with Automotive News Canada.
"We control the price, which
allows us to do full online [sales
and marketing]. It's kind of a
hybrid model, where we sell
direct but use an agent. They're
facilitating the sale but don't
own the car, and they're selling

REFRESHING VIEW
Genesis cars are sold in Hyundai stores in the United States,
but the brand is stand-alone in Canada. Agents sell on commission, and the price is set by the company.

it on commission."
Currently, most agents
are in Toronto, Montreal and
Vancouver, and five more
stores will open in those areas
by the end of 2017. The company plans 31 locations by
2021. "There are 14 market
areas in Canada that account
for 85 per cent of luxury car
sales, so we'll be able to cover
the majority of the luxury
car market with our current
plan," Ricciuto said.

ONLY IN CANADA
A Canadian creation
unique to the globe, the sales
plan was developed in Canada,
for Canada, and a new Toronto
location is the first Genesis
stand-alone boutique in the
world. The brand is sold in
Hyundai stores in the United
States, but is strictly standalone in Canada.
Genesis agents were select-

ed from existing Hyundai dealers. "When we developed this
business model, we thought the
dealers might fight it, but when
we explained it, only one out of
19 rejected it," Ricciuto said.
"We're smart enough to
know we've invested a lot in
our dealer organization and
we want to use their expertise
in selling and servicing cars,
but we want to modernize that
approach.
"We're trying to get rid of
some of the things customers hate, like haggling and the
upselling."

ALL-IN PRICING
The cars come with one
price per trim level, which
includes delivery charges and
five years of maintenance.
"Every dealer tries to differentiate on price, but then where
does the dealer focus attention?" Ricciuto asks. "Here,

Brian Nash of Stoney Creek,
Ont., was initially skeptical of
"the no-dealership thing."
(PHOTO COURTESY OF BRIAN NASH)

"They want you to order it
online, but when they told me
who my Genesis Experience
manager would be, I phoned
him. I was blown away when
they said, 'Instead of having a
test-drive, how about we drop
one off for the weekend and
you tell us what you think?'
No sales guy [sat] in the seat
beside me, and I thought that
was a refreshing view on car
sales."
Nash already owned a 2015
Genesis, "so I wasn't brandnew to the brand, but I was
brand-new to the concept of no
dealership," he said. "You're
doing things on your own time,
and having access to a car for
72 hours gives you an opportunity to really decide if this is
the way you want to go."
Sean Marriott of Toronto
also bought a G80 and was
one of the first applicants in
Canada. He initially chose the
Genesis for the car itself, not
for the sales experience, but
said, "I've bought a few other
high-end vehicles, and there
was no follow-up unless you go

Genesis Motors Canada
Brand Director Michael
Ricciuto says the Genesis
sales model will be hard for
others to copy as they have
established models where
they sell vehicles to dealers,
who then sell to
customers.
(PHOTO: HYUNDAI CANADA)

in for servicing.
"They've called three
times to see if I'm enjoying
the vehicle."
Ricciuto believes the sales
model will be difficult for
other automakers to copy
because they have established
models where they sell to dealers, which Genesis does not do.
"Our biggest issue is the
brand," he said. "It's trying to
take an Audi or Mercedes or
BMW owner and convincing
them that [Genesis] is designed
as well as their cars. It's just
getting across that Genesis
is for real. We understand it
will take time to overcome,
but the product will drive that
change." - ANC

Table of Contents for the Digital Edition of Automotive News Canada - July 2017