Can Genesis really compete with Mercedes-Benz, BMW and Audi - or will it suffer the same fate as Infiniti? Why 2022 could be pivotal for Hyundai's premium brand in Australia

It’s not unkind to say expectations were low when Hyundai first spun-off Genesis as its own luxury brand in Australia.

After all, the South Korean brand’s decision to launch a standalone luxury brand coincided with the slow, painful demise of Nissan’s own attempt with Infiniti.

Despite the best efforts of the marketing team, any optimism around Genesis was tempered by the fact it launched with the G70 and G80 sedans, the types of cars even luxury buyers were abandoning in favour of SUVs.

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Speaking to insiders at the time, however, revealed the long-term view held within the company and provided some hope for the future.

While not something stated publicly, there was a sense the G70/G80 pair were a ‘soft launch’ for the brand, paving the way and helping the new brand iron out any kinks before the all-important new SUVs arrived.

And arrive they did, with both the large GV80 and mid-size GV70 hitting showrooms within the last 18 months. The sales improved accordingly in 2021, with Genesis enjoying a 220 per cent increase in volume last year – although it’s easy to have big growth when starting at such a low number.

Genesis sold 229 cars in 2020, so the 734 vehicles sold in ‘21 was a big upswing but is still modest when compared to the sales of the ‘Big Three’ luxury brands - Mercedes-Benz (28,348 sales), BMW (24,891) and Audi (16,003).

Anyone either within or on the outside of the company truly expecting Genesis to rival the German trio is kidding themselves. So, what is a realistic goal for Genesis in 2022 and beyond?

The most obvious target is Jaguar, an established premium brand that had a disappointing 2021, selling just 1222 cars. If Genesis can do that in ’22, it should set a mid-term target of closing in on the likes of Lexus and Volvo, both brands which sold just over 9000 vehicles last year.

In order to achieve both of these goals, it will need continued steady growth, which is why 2022 is so important. If the brand was to stall out and lose momentum this year, so soon after launching, it would make future progress far more difficult.

That’s why Genesis Australia has taken a ‘slow and steady’ approach, with limited dealers (referred to as Studios) and test drive centres. Currently, there are only two Genesis Studios, one in Sydney and one in Melbourne, with test drive centres now located in Parramatta and the Gold Coast, with plans to open more shortly in Melbourne, Brisbane and Perth.

Instead of investing millions into standalone dealerships that aren’t needed for what is still a relatively small line-up, Genesis Australia has opted to focus on a customer service model that will try and separate it from bigger brands.

Its ‘Genesis to you’ concierge service is the centrepiece of this concept, with the company bringing test cars to interested individuals rather than making them come to dealers. The same service also picks up and drops off cars for scheduled servicing, the first five years of which are included in the purchase price of the car. 

It would be nearly impossible for the bigger luxury brands to offer such a personalised service, so Genesis is using its small size as an advantage at the moment. But it can’t stay small forever. The brand has let it be known that its ambition is to eventually have a 10 per cent market share in any segment it competes in.

Currently, its best performing model in that scenario is the G80 sedan, which has a 2.0 per cent share of the large luxury sedan market, which is one of the smallest segments in the country.

The SUVs aren’t faring much better, with the GV70 having a 1.1 per cent share of its segment in 2021, and the GV80 a 1.4 per cent share against its rivals.

This coming year will be a crucial test for the Genesis brand and the GV70 in particular. it was always expected to be the brand’s most popular model, so its first full year on sale will be a marker for how well Hyundai is accepted into the luxury space.

Most importantly, though, Genesis can’t fall into the same trap as Infiniti, which was lacklustre product and a muddled marketing message. It needs to make a statement and offer competitive models, even if they will sell in smaller volumes.

Fortunately for Genesis, it has three new models incoming for this year - GV60, Electrified GV70 and Electrified G80, all of which are due to arrive in the second quarter. 

The GV60 is the Genesis version of the Hyundai-Kia ‘e-GMP’ electric vehicle, so it’s closely related to both the Hyundai Ioniq 5 and Kia EV6 - both of which proved to be an immediate sell-out. That puts pressure on Genesis to do the same, because it wouldn’t be a good look for the premium brand to struggle with a task the mainstream brands managed easily.

The same is true of the Electrified GV70. Demand for EVs is increasing and Genesis has long stated that its future is electric, so it will need to push its battery-powered models hard in 2022 – although the Electrified G80 will be a niche model given the limited interest in sedans.

In short, Genesis has the ingredients it needs to become a successful luxury brand in the coming years, but it will need to continue the growth this year or risk losing its way.