Genesis Trying to Get Dealership Mix Right

Imagine buying a premium sedan from your local Hyundai dealer. It’s not quite the experience you’d get walking into a Lexus or BMW dealership, and Genesis is painfully aware of that. Like Cadillac, it’s seriously considering standalone locations, but for now it must settle on a half measure.

Actually, half is a pretty appropriate, considering the current plan as detailed out by Wards Auto entails half of the current Hyundai franchise retailers losing their rights to sell the Genesis brand. That’s coming this fall, with the launch of the 2019 model lineup.

Currently, 850 dealerships across the United States can sell Genesis vehicles. With a new agreement retailers must sign, requiring an elevated customer experience, Genesis anticipates the number of authorized dealers to drop to about 400. While that’s pretty dramatic, Genesis wants to get even pickier, meaning that number will go down.

Maybe you think limiting who can sell the brand is a bad idea, but this is a strategy of exclusivity. After all, people who spend a truckload of money on a luxury car aren’t interested in there being a whole array of dealerships that can sell them a vehicle. Instead, they want exclusivity.

Genesis should be done whittling down the current dealership selection by the end of February. It’s working with each state to secure the ability to license separate Genesis franchisees. According to the Wards Auto report, the brand already has licenses secured in 40 out of 50 states, with the remaining 10 expected to be locked up by the end of 2019.

This is a painful culling, and Genesis will make enemies while reshaping the brand.