Genesis of a Dealer Dispute With Hyundai Motor America

2018 Genesis G80 - Image: Genesis Motors

You would think you’d be happy when a peer succeeds and goes on to greater things, but the reality is often a little grimier and less magnanimous. Genesis has been a sore subject around Hyundai Motor Company ever since the automaker spun it off into its own brand. However, this has less to do with its role as an elite nameplate and more about how to manage it as part of the greater whole.

Earlier this month, dealers expressed their dismay by walking out of a meeting with Hyundai Motor America’s executives — which included CEO Kenny Lee and COO Brian Smith. The incident didn’t last particularly long and the conference eventually got back on track, but it proves there’s unresolved issues as to how the Genesis brand should be handled.

According to Automotive News, dealers were upset at a proposal made by Hyundai that would see Genesis’ luxury vehicles sold at non-Hyundai retailers. Sources claimed they also weren’t particularly pleased with the amount the company planned to compensate stores that would no longer be eligible to host the upmarket brand.

Dealers exited the meeting suddenly to talk amongst themselves. Currently, stores have to undergo an approvals process to sell certain Genesis products. But Hyundai wants to create standalone retailers over the next few years to increase overall volume for the brand. It now appears concerned that the existing dealer network won’t be sufficient — especially if Genesis is going to maintain a prestigious image.

“One of the best things about this closed process is the candid approach taken by the dealers and company personnel allowing us to speak openly and freely and reach mutually agreed upon decisions,” Hyundai of America said in a statement to Automotive News. “At this particular meeting, during a conversation on the Genesis brand, the dealers asked to have further discussions on the topic, which already are taking place.”

At present, around 352 Hyundai stores are eligible to sell the Genesis G90. Ideally, Hyundai would limit the luxury sedan to a smaller number of exceptionally nice retailers with Genesis-specific showrooms in regions where the vehicle is most likely to sell. The company announced its goals in August but hasn’t yet come up with a plan that appeases its existing retail network. It hopes to have something everyone can agree on by April.

“The company’s intent has always been that Genesis vehicles will be sold exclusively through a distinct Genesis dealer body that is profitable for dealers and will deliver the luxury experience Genesis buyers expect,” Hyundai said. “Both the company and the dealers are in complete agreement that this is critical for the success of the Genesis brand and the dealer body.”

[Image: Hyundai]