What’s in store for Genesis: More stores

With four showrooms open to customers, 11 under construction and six in the permitting phase, Genesis Motors Canada is quickly transforming itself from an online-only luxury-vehicle shop into a brand with a firm footing in both the real and digital worlds.

Genesis is moving “lightning fast” on its brick-and-mortar transition but not giving up on the key differentiators that have taken it from launch to thousands of annual vehicle sales in less than six years, said Eric Marshall, who took over as director of the company’s Canadian operations Sept. 1.

“The original intention of the brand as we launched was to be a digital brand,” Marshall told Automotive News Canada. “Now we’re moving more toward an omnichannel business model.”

Because Genesis already had the digital infrastructure needed for an omnichannel buying experience, it has focused much of the past couple of years on working with its 30 Canadian distributors to build physical showrooms to add an in-store element.

The first of what it calls Genesis Retail Experience facilities opened in London, Ont., last December. Three others have since opened.

The early customer feedback has been very positive, Marshall said. Sales at the two locations open long enough to report meaningful results have been “taking off,” he said.

“With these investments coming in, there is a requirement, obviously, to grow volume to be able to ensure our partners remain engaged but also remain profitable.”

STORES  HAVE ‘STREET CRED’

After less than a year since opening the showroom at Genesis London, about half of the customers are now getting their start with the brand by stepping through the front doors, said Hass Hijazi, managing partner of the Genesis store and neighbouring Finch Hyundai.

Previously, the London distributor would get occasional walk-ins at its Hyundai dealership, Hijazi said, but the “hustle and bustle” of the mainstream brand’s showroom did not always convey the desired luxury experience. The dedicated Genesis store ensures luxury buyers feel entirely at home, he said.

The physical location also demonstrates staying power.

“The facility gives us some street cred,” Hijazi said. “We’ve invested in this beautiful facility, and this is a brand that’s here to stay.”

Likewise, sales signal that Genesis is carving out a permanent place in Canada. The brand has logged strong growth over the past two years, even as overall vehicle sales have floundered because of supply chain problems.   

In the first nine months of 2022, Genesis sold 4,410 vehicles in Canada, compared with 3,288 in the first nine months of 2021. For all of 2021, it sold 4,569 vehicles, up from 1,462 in 2020, according to the Automotive News Research & Data Center.

‘CONTINUING TO EVOLVE’

As Marshall takes the reins at Genesis Motors Canada from former Executive Director Lawrence Hamilton — who assumed control over the brand’s European operations Sept. 1 — he plans to hold steady on corporate strategy.

“Are we planning to make any changes? No. We’re just continuing to evolve what we’ve been working on,” he said.

Marshall was among three employees at Genesis Motors Canada when the brand launched in late 2016, serving initially as senior sales manager before being promoted to lead national sales in 2019. The brand’s Canadian operation has since grown its corporate ranks to about 25.

Far more are employed at the distributor level, with added hires to come as more brick-and-mortar locations open. All 30 Genesis distributors in Canada will have put down physical roots by next year or at least started the process, Marshall said. Each will have 16 to 24 employees.

While the physical locations are a shift from the brand’s original vision, Genesis’ use of the agency model — with corporately owned inventory, distributor partners as opposed to dealers, and no-haggle pricing — remains unchanged.

The blend of new physical space and the time-tested digital sales infrastructure are paying off at the distributor level, Hijazi said.

“We’re seeing a real combination of the two worlds almost collide,” he said. “People come in. They’ll take a vehicle out for a drive. They’ll have a demonstration from one of our experience managers. They’ll go home, and they’ll complete their purchase online or at least continue it online.”

Along with “really enjoying” the combination of digital and in-person options, Hijazi said, luxury buyers like that the company’s one-price policy lets them avoid the nuisance of negotiating.

“They’re able to pull the trigger on their terms,” he said, “and the rest is easy.”

‘PEOPLE ARE GIVING US A SHOT’

The approach is clearly resonating with longtime luxury buyers, Hijazi said, pointing to the types of vehicles new buyers are trading in.

“We’re seeing a lot of BMWs, Mercedes [and] Audis come in on trades, so people are giving us a shot,” he said. “And I think with the great service we offer, that makes the difference.”

Marshall and Hijazi also credited the introduction of a pair of crossovers in late 2020 and early 2021 for fueling sales growth over the past two years.

Genesis sold a combined 1,787 GV70s and GV80s through the first six months of 2022, compared with combined sedan sales of 772 units. In 2021, the brand’s pair of new SUVs outsold its sedans 3,075 to 1,494, according to the Automotive News Research & Data Center.

Marshall expects Genesis to continue to increase its sales in Canada but said “controlled” growth will be the priority to ensure volumes do not outstrip the brand’s customer service capacity.

Genesis: Our strategy eases stress on supplies

As with other automakers, Genesis Motors Canada continues to face supply chain problems. But Director Eric Marshall said the company’s relatively light volumes and its online sales model have helped insulate it from some of the worst effects of the inventory shortages.

“Our consumers are actually telling us exactly what they want — what trims, what colours,” Marshall said. “We get that flexibility working with the Korean factories to be able to really tailor the vehicles to customer demand and be able to bring in product faster to those specific customers.”

Nevertheless, high demand and tight supply mean customers are typically facing monthslong wait times for Genesis’ two highest-volume vehicles this year. Current buyers of the GV80 crossover can expect to wait three to four months for delivery, while GV70 buyers should plan on six to eight months, Marshall said.