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New Luxury Car Brand Genesis Has a Ton of Potential

(And Should Probably Scare the Heck Out of Other Luxury Manufacturers)

It looks like Hyundai really isn’t messing around when it comes to getting their new luxury brand Genesis off the ground. The new subsidiary car company already has somewhere around 350 dealerships across the country where the vehicles are available new and while that’s all well and good, there are some neat promises that will accompany the brand to up their luxury game.

For one, they intend on making most trips to the dealership a thing of the past when it comes to getting scheduled maintenance or repairs taken care of. Instead, they are planning to bring a loaner car right to the customer’s home and take the owned Genesis with them. Likewise, they’ll deliver the car back to the owner when the work has been completed. Where this differs from other brands is that it is a company-wide effort to offer this level of service as opposed to one that may or may not be offered from dealer to dealer.

What is crazy to think about is just how quick Hyundai began their move into luxury automaking. As pointed out by Chris Woodyard for USA Today, “Other luxury brands had years to plan the spinoff of their luxury brands. Hyundai did it in nine months.”
That also meant a heck of a lot more work than just designing and building the cars themselves, which Woodyard explained further, saying, “It’s fallen to a veteran auto executive Erwin Raphael to try to create a separate identity around the brand called Genesis. That has meant trying to get the word out and educate the dealer network about what it’s going to take to please luxury customers.”

Now, this move into the Luxury market by Hyundai should be more than just a little scary when it comes to other luxury brands like Mercedes-Benz, BMW, Acura, Lexus and others. In recent years, Hyundai has proven ridiculously capable when it comes to marketing and rebranding. Starting from scratch with a new brand should mean it is just that much easier for them to quickly build a reputation and a following.

Let’s look at what they did with the core Hyundai brand. Although they have been making cars since the late ‘60s, Hyundai didn’t really come into its own in the U.S. until the company started aggressively marketing here in 2000. Previous to that, they were barely regarded as decent when it came to bargain car companies were concerned, and honestly that view of them is generous considering they were not even close to being a recognizable household name at the time.

Since then, Hyundai has seen one of the most impressively meteoric growths ever witnessed in the automotive industry, and their growth is still going.

Less than a decade ago in 2008, the Hyundai Motor had barely broken into the top ten car manufacturers in the world. By 2012, they had made their way to the number five spot and currently they are the third largest car manufacturer on the planet, behind only Toyota and Volkswagen. They even own the single biggest car factory on Earth, which can be found in South Korea and builds more than one-and-a-half million cars every year in that one location alone.

As if all of that wasn’t scary enough to their competition, Genesis Motors has some real heavy hitters on their side when it comes to the luxury car manufacturing industry. Specifically, this is Genesis senior vice president Manfred Fitzgerald and brand designing lead Luc Donckerwolke. Fitzgerald used to be the director of brand and design for a little car company called Lamborghini. Donckerwolke was the design director for Bentley, Audi and Lamborghini.

Nevertheless, there is one thing that us Mercedes-Benz lovers can always be happy about no matter how the probable Genesis vs. Mercedes-Benz battle plays out: We have access to an incredible selection of beautiful and powerful classics that no new company could ever hope to compete with. Sure, that may not offer much peace of mind to Daimler, but it sure is for us. There really isn’t much more in the world that is nearly as cathartic as replacing a classic Mercedes-Benz transmission and taking a spin in a 35-year old car that rides like it’s brand new.

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Wouldn’t Supply and Demand Lower the Cost?

Car manufacturers like Kia and Hyundai make pretty nice, luxurious-feeling cars full of features at a reasonable price. These end up being marketed as a good value, which in turn targets buyers who aren’t looking to pay a lot of money for a luxury vehicle. While the car you buy from a company like this will still be a good one, they aren’t anywhere near as luxurious as those you might get from a luxury brand that sells its vehicles for two or three times the amount.

The reason this is the case is primarily because of two factors. The research and development that goes into creating each brand’s line of cars and the materials used to build them. The autos made by more expensive luxury car brands like Range Rover, Lexus and Audi simply require a higher price tag to continue producing the kind of luxe that their customers have grown accustomed to. When it comes to crafting those new vehicles, the research and development alone can be incredibly costly. For example, the R&D that goes into Mercedes-Benz parts is much more costly than what you would expect to find from a brand like Hyundai, but that also means they last longer and generally have a better resale value.

Furthermore, the cost of the actual materials that go into making high-luxury vehicles doesn’t scale like many other types of manufacturing. Where tons of companies can lower prices the more they produce a certain item, high-end products – be it cars, electronics, shoes, furniture or anything else that gets put on the market. For example, fabrics can be made from synthetics or grown relatively quickly to create the covers for seating in a car, the more-luxurious option of leather is going to cost more due to being more difficult to cultivate and process.

One of the best ways to understand why luxury car makers can’t mass produce and sell their vehicles cheaper is to look at it in the scope of ordering pizza (odd analogy, I know, but hear me out). If the pizza place makes two sizes of pizza, it is like asking them why they can’t sell their large pizza at the same price as the small just by making more large pizzas. More ingredients go into making the bigger pie and, therefore, is just going to naturally cost more. Likewise, nicer cars use better materials that simply require more money.

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Don’t Be Afraid to Show Your Success

In general most people don’t consider cars as much of an investment beyond perhaps modern fuel efficient cars as a means to save money. A luxury car is what people buy to show off their disposable income, and as cars are driven they depreciate in value, so how does one consider a luxury car an investment for any business savvy man?

It all comes down to image and ego, if the luxury cars are the toys of the wealthy then obviously having one is a sign of being successful. You pay that extra money to get the Mercedes-Benz and people will see you driving it or getting out of it and think that you must be successful to drive a car like that around.
In the business of sales, marketing and most importantly consulting, your image means everything to the client. Nobody is going to take money advice from someone who doesn’t look like they have a cent to their name, so consultants invest and get a good shoes, suit, tie, the whole deal to look presentable to their customer. If you are going that far to convince your customer that you have money and are thus credible, then the Porsche or Mercedes or whatever brand sounds most prestigious in your area would be an accessory to credibility.

When it comes down to it, if customers see your car, or your business place, or you, and they feel like your competitor has more money than you, they will assume that your competition is the better business. Many people do not change their first impressions, so not having everything in order to look great is a way to lose sells to your competition that went the extra mile in presentability.

But if you need a luxury car to get more money to become more successful, then wouldn’t you already need to be successful to get the car? Not necessarily. A salesman cares about making the best impression to the widest audience possible, and typically a low enough percent of the population know enough about cars to know that your Mercedes is 4 years out of season with a fresh set of rims purchased for the cheap online to keep the sparkle like it’s new and valuable going.

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