TORONTO — Hyundai Canada CEO Don Romano says Genesis’ sales model should not be construed as an attack on traditional dealerships. Instead, it’s based on the concept of giving customers their time back.
Romano, speaking here Thursday at the Automotive News Canada Congress, said the luxury brand’s launch has given the company insights into how customer taste in auto retail is shifting. Genesis, which spun off from Hyundai in 2015, retails primarily through online sales and agents, with vehicles being delivered to customers for test drives and final sales.
“The misnomer is that we’re going direct around dealers,” he said. “The truth is we’re evolving with our dealers as partners with a new business model. And that business model is based on one simple premise: Saving customers time and making it more efficient, easier and more transparent to buy a car.”
Genesis’ retail model is one of the latest examples of automakers investing heavily in their online retail options in response to changing consumer demands. Executives such as Romano see the internet as a way to build trust with consumers leery of traditional vehicle sales models.
Romano said that doesn’t mean Hyundai sees dealerships or salespeople disappearing. Instead, he said he views them as vital to explaining and pitching new vehicle technologies to consumers.
“The simple idea was to be able to access a car completely online. The fact is, though, that no transaction can be done completely online. It’s the second biggest investment in somebody’s life, and you need help,” Romano said. “Just the fact that the technology in our vehicles has grown to the level it’s at right now, we need to consider fitting a customer to our car like we do a suit at Harry Rosen. It’s the same thing. There are so many aspects of that vehicle and that technology that needs to be explained and needs to be customized for our customers.”
Romano said Genesis, which has a few standalone boutiques in Canada, will eventually be in separate showrooms at existing Hyundai dealerships.
“What we’ll see in the future is side-by-sides,” he said. “We are remodelling all the Hyundai stores across the country and those dealers that are going to be Genesis agents will have a separate showroom, but on their facility and fully leveraging all the technical capabilities of that service in the back and all the equipment and training we’ve invested in over the years.”
Over time, he said that experience and technical expertise will give Genesis an edge over companies such as Tesla that position themselves as disruptors in the automotive industry.
“That’s our advantage over a Tesla that just walked into the industry and said, ‘Hey, we’re going to change everything,’” he said. “It’s not so easy. I think they’re learning that right now.”
Romano said he views Genesis and Hyundai as partners in testing new technologies. For instance, the company will launch Hyundai Express Shopping, which will offer online trade-in appraisal, credit applications and appointment scheduling on dealership websites, in Canada later this year.
“We’re going to take some of the learnings from Genesis, we’re going to apply it to Hyundai, we’re going to watch it incubate and then we’re going to feed it back and forth,” Romano said.