Top Ge­n­e­sis brand to de­but in main­land

China Daily (USA) - - BUSINESS - By REUTERS

South Korea’s Hyundai Mo­tor will launch its stand­alone pre­mium Ge­n­e­sis auto brand in China within two to three years, bet­ting­ona lux­ury lane to profit as com­pe­ti­tion bites at the lower end of the world's big­gest auto mar­ket.

Ge­n­e­sis brand chief Man­fred Fitzger­ald said in a re­cent in­ter­viewthe com­pany is con­sid­er­ing build­ing Ge­n­e­sis mod­els in China for sure. But there are also other ex­am­ples of (au­tomak­ers) who­live pretty well off of im­port­ing cars,” he said, cit­ing Toy­ota Mo­tor Corp’s Lexus.

The plans come asHyundai tries to re­verse out of 10 straight quar­ters of fall­ing prof­its, hit in part by sales weak­ness in China.

Rolling out Ge­n­e­sis in key mar­kets like China marks a shift for a com­pany bet­ter known for mak­ing value-for­money cars and lack­ing the brand ca­chet and tra­di­tion of Ger­many’s BMW, MercedesBenz and Audi. That trio dom­i­nates the lux­ury mar­ket glob­ally— and in China.

“The lux­ury cus­tomer in China is very brand-con­scious,” said US na­tional Fitzger­ald, 53. The for­mer ex­ec­u­tive with Audi’s Lam­borgh­ini brand was speak­ing at the first, and so far only, stan­daloneGe­n­e­sis store, in a glitzy mall in Hanam on the out­skirts of Seoul fea­tur­ing cars like G80 sedans that can fetch up to 74 mil­lion won ($67,100).

“If you don’t get your brand right, you can have the best prod­uct in the world, it won’t work,” said Fitzger­ald. “In two, three years’ time we will be en­ter­ing China,” he said, de­clin­ing to give sales tar­gets for a global roll­out that will fol­low launches in South Korea late last year and in the United States last month.

In­China, im­ported cars carry a duty of more than 20 per­cent, putting pres­sure on au­tomak­ers to pro­duce lo­cally.

Ge­n­e­sis will open more stand­alone out­lets, said Fitzger­ald, and is ex­plor­ing un­spec­i­fied lo­ca­tions for its first US store. The Ge­n­e­sis lineup cur­rently fea­tures two mod­els, a range that the com­pany plans to ex­pand to six by 2020, in­clud­ing two sports util­ity ve­hi­cles.

Con­sul­tants like Eric No­ble, pres­i­dent of Cal­i­for­ni­a­con­sul­tancy CarLab, say get­ting the sales chan­nel right for pre­mium cars is as im­por­tant as the prod­uct it­self.

For now, over 300 of Hyundai’s more than 800 US deal­er­ships will also be sell­ing the Ge­n­e­sis brand, pos­ing an added chal­lenge for dif­fer­en­ti­at­ing it from Hyundai. By com­par­i­son, Toy­ota’s Lexus is sold through sep­a­rate deal­er­ships.

“From a prod­uct stand­point, the prospects of the (Ge­n­e­sis) brand are en­cour­ag­ing,” said No­ble. “But from a dis­tri­bu­tion stand­point, at least here in North Amer­ica, it is much more prob­lem­atic.”

min­i­mum level of duty on im­ported cars in China

BLOOMBERG

At­ten­dees view the Hyundai Mo­tor Co Ge­n­e­sis con­cept lux­ury ve­hi­cle dur­ing the 2016 New York In­ter­na­tional Auto Show in New York, on March 23.

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