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Genesis backtracks on no-dealership model

By Tim Robson, 06 Nov 2020 Car News

Genesis GV80

Luxury brand underdog opens ‘test drive centres’ to complement city centre boutiques

When Genesis launched as a standalone brand in 2019, it vowed that it would break the dealership mould by taking its brand into the heart of Australia’s biggest cities, eschewing the traditional concrete forecourt for a boutique studio to attract a new age of buyers.

Now, though, the challenger luxury brand has changed tack, establishing a number of larger-format showrooms in key urban centres. Known as test drive centres, Genesis insists that they shouldn’t be considered ‘dealerships’.

However, Genesis Australia management is adamant that the fledgeling brand needs to break some eggs in order to stake a claim in a sector dominated by the likes of Audi, BMW, Mercedes-Benz and Lexus.

"It’s definitely not the wrong step, but we’re introducing the test drive centres to complement the studios,” said Connal Yan, the operations lead for Genesis, speaking at the launch of two new cars for the brand, the G80 saloon and GV80 SUV.

“Therefore, going forward we’re going to expand on the studios continuously, into Brisbane and Melbourne, but at the same time we needed more operations to bring convenience to customers, which is why we’ve introduced test drive centres.”

Yan suggested that Genesis has a licence to try and break the traditional dealership model cycle.

“We’re a very young brand, so we have the flexibility to try a lot of different things, and this is a good example of how we are doing something on top to complement the studio concept,” he said.

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The showrooms will remain separate from locations currently occupied by parent brand Hyundai.

“It’s a very clear direction from head office that we will always be a standalone brand,” confirmed Yan.

While the view on boutique studio retail may have shifted slightly, the notion of a fixed price for all Genesis buyers has not, according to Stewart Parnaby, the national manager of marketing.

Genesis G80 2021

“Fixed pricing is an interesting challenge,” he said. “It comes from research that customers hate the negotiation process. So we said ‘that’s the price’. Doesn’t matter if you know the dealers, or you come in at the end of the month, everyone pays the same price because that’s what the car should be valued at.

“The perception of discount is something that has lived in the dealership for a really long time. We just want to be honest and transparent, so we’re just going to take that out.

"You should pay this much for this car, this is what it’s worth, this is what the ownership package on top is worth. Everyone then has the same starting point for their resale value… it’s fair.”

Genesis test drive centresWhen it comes to gauging the success of the brand in a tough market, Hyundai Australia CEO Jun Heo has set a lofty target for the challenger brand to aim for.

“If you ask us how we quantify market share, we’re looking at 10 per cent [of the luxury segment],” he said. “We want to be ambitious. And we still don’t have the full line up yet.

“But we are planning to touch 10 per cent market share. Obviously, when we have the product, we can get there faster.”

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He also noted that the company had done its homework, looking at the good and the bad in terms of luxury brand challengers.

“Before we launched Genesis, we have already studied the market,” he said. “The brand is already in the United States, so we have already learned some lessons. Before we launched the Genesis brand in Australia, we have learnt a lot of things and we have analysed the customers.

“We don’t just want to sell product, we want to deliver an experience. It will just take some time, and we are not impatient on this.”

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