Hyundai’s Genesis brand is a dark horse in U.S. luxury vehicle market

NEW YORK — When Hyundai engine launched its Genesis luxury brand nationally in 2016, many were skeptical that the South Korean automaker — known primarily for its economy vehicles at the time — knew what it was doing.

Among the skeptics were auto industry veterans Randy Parker and Claudia Marquez. Both worked for Nissan’s Infiniti luxury brand at the time and have since joined the Hyundai Group, with Parker heading up the Hyundai brand in the United States.

“We both looked at it like, ‘Oh, my God, how are these guys going to get out of this?’ “I mean, nothing against it. It’s just complicated. A new brand in such a competitive environment,” Marquez, who now heads Genesis in North America, told CNBC last week at the New York International Auto Show.

Not only was Genesis successful, but the brand flourished to become a dark horse in the American luxury market with unique style, unexpected comfort, and top-notch quality. This is the case for gasoline vehicles and electric vehicles.

The brand has surpassed the decades-old Infiniti brand in annual U.S. sales since 2022. Executives expect to continue double-digit annual growth over the next five years, according to Marquez, who was named North American COO of Genesis in October 2021.

“We need to get way ahead of the luxury market,” she said. “It’s going to continue to be strong. It needs to be a marathon, not a sprint.”

Genesis started as a vehicle in Hyundai’s lineup, but the company announced in late 2015 that it would become its own brand. Since then, its U.S. sales have grown from fewer than 7,000 vehicles in 2016 to more than 69,000 last year.

Along the same lines, Marquez and José Muñoz, president and global COO of Hyundai, emphasized that while robust growth from Genesis is expected, it will be at a limited pace to maintain residual values ​​and vehicle prices.

Muñoz said expectations for the brand are “still high,” but that its volume ambitions for the U.S. are more in line with competitors such as Porsche than those of Lexus and Mercedes-Benz, which sells hundreds of thousands of vehicles each year.

“We still have a long way to go, but it’s not a mass brand. So we don’t have huge ambitions in terms of volume, but there’s still a way to go,” Muñoz said, who is also the CEO of Hyundai Motor. and Genesis Motor North America, said in a separate interview at the show.

The brand’s closest competitors based on 2023 sales were Land Rover (71,727 units), Porsche (75,415 units), Lincoln (81,818) and Volvo (128,350). Genesis sales last year increased about 23 percent from the previous year to 69,175 vehicles.

One of Genesis’ biggest challenges remains awareness, Marquez said. Stephanie Brinley, senior automotive analyst at S&P Global Mobility, agrees with this perception.

“He’s a newcomer who has gained credibility; now he needs to gain a wider audience,” Brinley said. “He’s respected at this point. The problem is not many people know about it yet. … That’s the space he’s occupying right now.”

In the short term, Genesis is seeking to increase its awareness and sales with new high-performance “Magma” models. It intends to offer a performance variant for each production vehicle, the company announced last week in conjunction with the New York auto show.

The brand could also expand its range with a three-row SUV. Genesis revealed a large, all-electric concept SUV last week. Marquez declined to discuss potential production plans, but said to expect such a vehicle “sooner rather than later.”

Genesis currently offers three sedans (G70, G80, G90) and three SUVs (GV60, GV70, GV80). The G80, GV60 and GV70 are also available in a 100% electric version. Genesis starting prices for 2024 range from around $41,500 for the G70 to over $89,000 for the G90.

Worldwide, the Genesis G80 has been the best-selling model in the brand’s vehicle lineup since its introduction in 2016, with 390,738 units sold globally, including electrified G80 models.

The brand is expected to get a boost in local manufacturing with a new $7.6 billion factory expected to begin production later this year in Georgia.

Muñoz said Genesis will be a “key focus of the plant,” which will also produce Hyundai and Kia vehicles. The brand currently assembles the GV70 gasoline and electric SUVs at a factory in Alabama, while the other models are imported from South Korea.

“The products are very strong. They are very well received by the consumer because we have focused on (the United States),” Muñoz said. “This is without a doubt the largest market for a Genesis.”