No. 976
December 12, 2018
 

About The Autoextremist

Peter M. DeLorenzo has been immersed in all things automotive since childhood. Privileged to be an up-close-and-personal witness to the glory days of the U.S. auto industry, DeLorenzo combines that historical legacy with his own 22-year career in automotive marketing and advertising to bring unmatched industry perspectives to the Internet with Autoextremist.com, which was founded on June 1, 1999. DeLorenzo is known for his incendiary commentaries and laser-accurate analysis of the automobile business, as well as racing and the business of motorsports. Author. Commentator. Influencer. The Consigliere. Minister of the High-Octane Truth. DeLorenzo is considered to be one of the most influential voices commenting on the business today.

DeLorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. DeLorenzo is also the author of The United States of Toyota.

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Tuesday
Feb202018

BEATING A DEAD (FLYING) HORSE.

By Peter M. DeLorenzo

Detroit. Once upon a time in a galaxy far, far away I actually had high hopes for the Genesis luxury brand from Hyundai, because the stars seemed to be lining up in its favor. The fledgling luxury brand had the deep resources of Hyundai behind it, and, to the company’s credit, it had gone out of its way to hire some of the best and brightest automotive talent available in the business. This seemed to demonstrate that Hyundai finally had the desire to play the luxury game properly, understanding that it would not only take considerable amounts of cash to fund the effort, but that it would require a fundamental fortitude in order to compete at the highest level over the long haul, which it had not yet demonstrated up until this point. 

So this, by Hyundai’s account anyway, was truly a brand-new day, and Genesis would become a force to be reckoned with in the luxury business in no time. And if you had seen any of the PGA’s Genesis Open from the Riviera Country Club in Los Angeles over the weekend, you might have gotten the impression that Genesis is a real live luxury brand, with endless – and tediously repetitive – TV commercials to prove it, demonstrating its mettle, stating its purpose and offering its qualifications as a genuine automotive luxury brand to ConsumerVille.

But the requisite product look and features brought to life by slick TV commercials aren’t what they seem in this case, and if you dig a little deeper you will come to understand that Genesis is a brand in chaos, with a retail component that is in complete disarray. I’m not going to regurgitate all of the gory details here, but suffice to say Hyundai officials at first decided that Genesis would be sold at top-performing dealerships instead of going the all-new brick-and-mortar route, like Lexus did when it started here. But there were complications, starting with the fact that Hyundai already had a Genesis model in place at its dealerships. In typical fashion, Hyundai operatives decided to flip a switch and introduce the new Genesis division while its dealers still had the “old” Genesis model on their lots. (And let’s not forget that their previous top luxury model, the Equus, was still hanging around, which only added to the confusion.)

So, let’s review, shall we? The model previously known as Genesis became the new Genesis G80, while the top-line Equus would now become the Genesis G90. Capisce? If you think that sounds kind of confusing, you’re absolutely right, and Genesis sales – and the Hyundai dealers selling the new brand – suffered. The launch of the new Genesis brand was an unmitigated disaster, with piddling sales and only sporadic interest from consumers. 

What was the problem? Were the cars worthy? Yes, given the parameters needed to play the luxury game the cars came heavily equipped in standard form, were well executed, and cost thousands less than comparable entries from BMW, Mercedes and Lexus, especially the top-line G90. But it wasn’t enough. Why? Hyundai operatives have a long, dismal history of deciding how things will go for them in whichever segments they choose to play in and believing that they will automatically succeed, because a.) They want it to be that way and besides, b.) How could it possibly be anything otherwise? It’s that ugly “we’ll just flip a switch” mentality that rears its head every time with anything having to do with Hyundai. There’s this steadfast belief among Hyundai operatives that suggests that they’re the smartest guys in the room, and that they will not fail. And when they do, the executives in place – usually Americans – are jettisoned for not delivering unrealistic goals and assorted pipe dreams.

So back to the current chaos being unleashed behind the scenes with Genesis. Now, Hyundai operatives have decided that they do want separate Genesis showrooms, so they’re going around the country taking the Genesis franchise back from dealers in order to have a much smaller, more exclusive and more luxurious footprint for Genesis. That’s all well and good, but the proven reality for any launch of a brand – luxury or otherwise – is that you have a window of twelve to eighteen months to get it right. That means you have to decide on the image that you want to convey and then you have to demonstrate a focused consistency throughout the launch, making sure every last detail is accounted for. And since Hyundai has been stumbling around for going on three years poisoning the launch of the Genesis brand with its fits and starts and focused inconsistency, it has most decidedly blown its window of opportunity.

When I perused the Genesis website the company takes great pains to put their “Vision and Mission” for the brand in prominent position. It states the following:

We strive to create the finest automobiles and related products/services for connoisseurs around the globe. Our team of talented individuals around the world is led by our company’s values, where respect for one another in the quest of finding the best solutions for refined individuality dominates our work ethos.

Yes, of course, you could plaster those words on any luxury automaker’s website, but in this specific case they ring hollow. Connoisseurs around the globe? Please. And spare us the regurgitation of company values, because clearly the Hyundai work ethos counts for absolutely nothing at this point.

Hubris, arrogance and serial incompetence have defined the Hyundai modus operandi for so long that I’ve lost track. They operate in this vacuous netherworld of two steps forward and five back, and yet they insist on singing the “we got it goin’ on” song to themselves in a aria that is relentlessly off-key and stale. That Hyundai operatives have blown the launch and now re-launch of the Genesis brand was surprising only in its scope and its rapid descent into mediocrity.

I am reminded of those ominous words of narration by Joe Pesci’s character – Nicky Santoro – in “Casino.” I’m paraphrasing him here, but I can imagine Hyundai operatives sitting around a conference room table right now saying, reluctantly: “We fucked it all up.”

And that’s the High-Octane Truth for this week.

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