Hyundai’s five-year journey to build a luxury car brand

At Hyundai Motor Co.'s brand launch event held on Nov. 4, 2015, someone made an unexpected appearance on the stage, surprising the crowd. It was current chairman Chung Euisun, then-executive vice chairman, and until then, he had rarely hosted any official events. In fact, this marked his first time onstage in six years, since the launch of sixth-generation Hyundai Sonata in June 2009.

“From here on out, we will build our presence in the global luxury car market with Genesis at the forefront,” said Chung as he introduced the automaker's new luxury car model. 

“Chairman Chung faced strong opposition but insisted on creating a luxury car model. He technically ran the show for the Genesis brand,” said a Hyundai Motor source.

TASK FORCE SET UP FOR GENESIS CREATION

South Korea's first luxury car model Genesis will celebrate its five-year anniversary on Nov. 4. During this period, Genesis established a unique brand identity at home and abroad through its solid lineup and original design.

But its history dates back to 2004 when Hyundai Motor created a secret task force to work on a car to be on par with luxury models from Mercedes-Benz, BMW and others. In-house experts specializing in materials, powertrain, design, and architecture gathered to collaborate.

Their initial product was the first-generation Genesis, a full-size luxury sedan launched in 2008. It was the group’s first luxury car model as well as its first rear-wheel drive full-size sedan.

Chairman Chung and the executives believed that the car would usher in a new era for Hyundai Motor, leading to the name, Genesis. When the full-size Genesis sedan began to do well in Korea and in the US, Hyundai Motor made a surprise announcement: Genesis would become its own brand with a robust lineup, rather than stopping at one or two luxury car models.

This raised some concerns that launching a luxury car brand in the global market could be risky for Hyundai Motor, since the company’s selling point was value at an affordable price.

But Chairman Chung was determined. He believed that the group could not continue its growth in the global market without a successful luxury brand. Also, Chung predicted that in the long term, the company could actually end up in trouble if it kept only to the strategy of mass-producing cars in the low- to medium-price range.

At the Genesis inauguration ceremony, Chung stressed: “Change only comes when you challenge yourself, and change brings new possibilities.” 

STELLAR GROWTH WITH DOUBLED SALES

Genesis saw incredible growth after its 2015 launch. In the following year, the company sold a total of 57,451 units at home and abroad. This year, the company expects to exceed 100,000 units in sales, almost doubling sales in just five years. Genesis is also expected to outperform foreign luxury brands including Mercedes-Benz, BMW and Audi in the Korean market for the first time.

Between January and September this year, Genesis sold 77,358 units in Korea while Benz and BMW sold 53,571 and 41,773 units, respectively. Until last year, Genesis sales were always around 10,000 units behind Benz.

“It shows that domestic consumers consider Genesis to be on the same level as Benz and BMW,” said an industry source.

The company also significantly expanded Genesis' lineup. At the time of its launch, there were only two models, which were both full-size sedans – the G90 and the G80. In 2017, the company released a mid-size sedan G70 and this year, it will release its first sports utility vehicle, the GV80. The company also plans to roll out a mid-size SUV, the GV70 by the year-end.

Despite being a latecomer to the global luxury car market, Genesis has been well received, maintaining a leading position in US-based automobile market research provider J.D. Power’s Initial Quality Study for four consecutive years since 2017. This year, Genesis also claimed the first spot in J.D. Power's 2020 Vehicle Dependability Study, beating Lexus that had maintained the No. 1 position for eight consecutive years. Also, G70 was selected as the 2019 North American Car of the Year, reflecting the brand's global popularity.

Next year, Genesis plans to unveil a lineup of electric vehicles built on Hyundai Motor’s proprietary Electric Global Modular Platform (E-GMP), alongside the EV G80 and G70 wagon-type models.

“If the past five years was a period of Genesis solidifying its brand identity, the next five years will be a period of Genesis competing with foreign luxury brands in the global market,” a Hyundai Motor source said.

Write to Byung-uk Do at dodo@hankyung.com
Danbee Lee edited this article.