Genesis: A New Beginning for Hyundai? -- by Nate Winter

Hyundai has unveiled its next big thing: the Genesis, a high-powered, luxury sports sedan that intends to revolutionize the world's perception of Hyundai. The Genesis boasts 375 horsepower-- that’s 75 more than a Mustang GT and nearly as much as newer Corvettes. To its muscle car power the Genesis adds luxury styling akin to BMW and Mercedes-Benz . But unlike all these competitors, the Genesis plans to do it for under $30,000.

And with the Genesis, Hyundai has launched the new “Think About It” campaign. This low-end automaker is making abundantly clear its intention to class up its reputation in the automotive marketplace.

So the question is: will Hyundai, the Genesis, and “Think About It” succeed? Will they sell more Hyundais? Will they re-establish the automaker as a competitive player in the luxury sport sedan segment?

My opinion: I think the Genesis will be successful IF it is everything is claims to be. However, in my mind, that’s a big if. Creating a car with these specs that sells for under $30K would be a challenge for even the most respected automakers. But this is Hyundai, a brand steeped in mediocrity. While Hyundai vehicles like the Santa Fe SUV receive rave reviews, Hyundai benefits neither from the reputation for reliability that Toyota and Honda enjoy nor the fun to drive experience touted by Mazda and Mini. Even if the Genesis delivers as advertised, skepticism will no doubt hinder sales, at least in the beginning. Hyundai took a huge gamble when it asked for the world’s attention with the promise of the Genesis. And, like any gamble, its success will be dramatic and its failure shameful.

So if it’s everything it’s cracked up to be, the Genesis will succeed but only among a market of relatively low end car buyers. The Genesis could be an option for buyers seeking performance and luxury who can’t afford the more established options. That is, if they can afford the fuel devoured by Genesis’ 375HP V8 engine. But regardless of price, no one is going to abandon their Mustang, Corvette, BMW, or Mercedes for a Genesis for one simple reason: the Hyundai brand does not connote luxury or performance.

The state of the Hyundai brand is one of undoubtedly good, but forgettable low-end vehicles: Elantra, Sonata, Tiburon, Santa Fe. And some vehicles so forgettable they don’t sound even remotely familiar. Azera, anyone? Don’t forget the VeraCruz! Too late. These are the types of models that have defined Hyundai for decades and built its brand as a middle-of-the-road manufacturer of affordable vehicles.

Even if all the models listed above are as solid as the Santa Fe, that success doesn’t suddenly qualify Hyundai as a high-performance, luxury, sports sedan manufacturer in the minds of buyers. The Hyundai brand is so firmly associated with unexceptional affordable cars, it will take decades of difference to truly change public perception about what it means to drive a Hyundai.

This brings me to the "Think About It" campaign, Hyundai's attempt to overcome its branding woes. Branding is an emotional association with a company or product. While in small ways branding is based on facts and logic, it is most often the result of personal experiences with the company or its product. Because every experience the public has had with Hyundai up until now was rather ordinary, the Hyundai brand is characterized by the ordinary.

The “Think About It” campaign is a clear attempt to out-reason the emotional aspect of branding by getting people to look at the facts and figures of the Genesis. And it has some impressive stats: 375HP, V8, sport luxury styling, under $30K, etc. Using a completely logic-based comparison, the Genesis would probably appear to be the better option than the Mustangs, Corvettes, BMWs, and Mercedes-Benzs of the world. But despite Hyundai’s plea to remove the emotional aspect of its heritage from the purchase decision, branding simply doesn’t work that way.

And frankly, buying a luxury performance sedan doesn't work that way either. With affordable cars like the Elantra and the Santa Fe, a logical sales approach can be very effective. Elantra and Santa Fe buyers are people who need a vehicle to satisfy specific functional requirements: low sticker price, good fuel economy, seating for seven, ample cargo space, etc.

With performance cars, the reasoned approach no longer applies. Who needs, really NEEDS a car that can go 0 to 60 in under 6 seconds? Nobody. Performance vehicles are emotional purchases, not logical ones. It's about the exhilaration of responsive handling and quick acceleration. And make no mistake, the buyer's ego factors into the equation, too. You don't buy a Corvette just because it's fun to drive. You buy it because people will see it and say to you, "Damn. Nice Corvette." The social perception of a performance or luxury vehicle plays a major role because this is a purchase based on the emotional experience of driving. What will people think when the first Genesis buyers pull up next to them at a stop light? It remains to be seen, but whatever the reaction is, it will play a role in the sales success of the Genesis. This fact marks a huge weakness in Hyundai's logic-minded "Think About It" campaign and could be a position that fails to resonate with buyers.

I predict the Genesis will sell well among low-budget buyers. But it will not change the way public perception of Hyundai. The Genesis could be a bold first step on the road to brand improvement for Hyundai, but it will only be a step.

In my opinion, a better option for Hyundai would be to follow the example of Toyota and Honda by creating a separate luxury brand. When Toyota entered the luxury vehicle market, it knew that the Toyota brand’s reputation for affordable vehicles wouldn’t fit. Who wants to buy an over-priced Toyota? Toyota’s answer? Lexus, a completely new brand owned by Toyota that focuses solely on luxury vehicles. Honda and its Acura brand are the same way.

Hyundai should take a hint from the success of Toyota, Lexus, Honda, and Acura by forming a new brand around the Genesis. This new brand could focus on the luxury and performance aspects of the Genesis without having to fight off all the low-end brand baggage of Hyundai. Marketing the Genesis brand could focus on the intense emotional experience of driving its powerful, luxurious new cars instead of avoiding emotion altogether with the “Think About It” campaign because of Hyundai’s weak brand. Genesis’ success will relate to the strength of the Genesis brand and ignore the unimpressive Hyundai brand, resulting in solid Genesis sales and the same old vanilla reputation for Hyundai.

-- Nate Winter