As Inventory Dwindles, Genesis Prepares to Turn It On Again

If you noticed your neighbor adding a glistening new Genesis model (the midsized one or the bigger one) to their driveway in the past month, you’re a member of a very small group.

Genesis, the luxury marque born of Hyundai, didn’t sell many vehicles in August, but that’s all part of the plan. The brand’s executive director claims there’s less than a month’s worth of vehicles currently in the U.S., but once those ships arrive, look out. Actually, a better way of phrasing that is: “prepare yourself for things to occur in a gradual and measured fashion.”

After seemingly continuous revamps of the fledgling brand’s dealer model, head office has settled on a final plan — one that won’t be ready by the time the 2019 models arrive. Like the brand itself, it’s a work in progress, but at least there’s a game plan.

In July, the brand’s senior group manager of PR told us that, after Genesis receives a distributor license in each U.S. state, dealers are asked to make a choice: accept a compensation offer and hand over their ability to sell Genesis vehicles, or apply to become a Genesis retailer. No one’s forced to build a standalone Genesis store a comfortable distance away from the Hyundai showroom, but Genesis would definitely prefer it. Either way, those stores won’t be ready in time for the 2019s.

The overall goal is to whittle down the roughly 850 Genesis-selling dealers to a more exclusive, manageable number covering key markets, though not as few as in an earlier plan. Hyundai projects the number of retailers to drop to 400 within the next half-year, but Genesis Executive Director Erwin Raphael wants a lower number.

“Four hundred is still higher than what is ideal,” Raphael told Wards Auto. “I think (ultimately) that will come down,” he said, adding that some dealers won’t remain profitable at projected sales volumes.

“It just doesn’t compute to 400.”

Not only will standalone stores remain a far-off proposition by the time the expanded 2019 lineup appears (Genesis adds the smaller G70 sport sedan to its car-only stable this fall), but Genesis doesn’t expect to have its full roster of state licenses and signed-on dealers until February. The brand has licenses for 40 states right now.

Meanwhile, the first 2019 models should begin appearing later this month at a small number of dealers.

“By the end of the year, we will be hitting on all cylinders,” Raphael said.

Genesis sales in the U.S. last month totalled 613 vehicles, continuing a steep decline seen in July. The brand cut off imports in March to drain inventory in time for its sort-of dealer network launch, which will go ahead with only 2019 models on the lot.

[Image: Genesis Motors]

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