Will the Genesis brand finally debut in Europe? "It could happen in a couple of years", Hyundai Chief Marketing Officer Cho Won Hong told Automotive News Europe during a recent interview in Milan.
Cho is well aware of the risks: "I know the European market is very difficult for new entrants like Genesis". That's why he pointed out that Hyundai will try "raise awareness of the Genesis brand even before vehicles are sold." For example, Hyundai will build a Genesis R&D center in a major European city, “thanks to which people will be able to understand what a brand is”, according to Cho.
Despite the positive sentiment, there are doubts that the European debut of the Genesis is already close. “If they don’t give a specific timeline, I wouldn’t be sure the launch will actually happen,” said JATO Dynamics analyst Felipe Munoz. In his opinion, "Two years is a long time and a lot can change."
Hyundai's premium brand has two big hurdles to enter the European market. First, Genesis has a portfolio full of sedans and almost no crossovers. This would be a disaster in Europe, where SUVs are the flagship item. Even large and truly luxurious sedans struggle to find buyers.
Three years ago, Hyundai Europe COO Thomas Schmid said the launch of the Genesis in Europe would be delayed due to the brand's lack of SUVs and suitable engines, particularly diesels. These issues are being addressed.
In January, Hyundai Executive Vice Chairman Euisun Chung noted that the manufacturer will introduce the Genesis crossover this year.
Cho told ANE that the brand would add "two or three new models" in the coming years.
The second obstacle is the nature and structure of the European premium market. It is very crowded and dominated by German automakers. “It will be very difficult for any new brand to enter this campaign,” Munoz of JATO said.
Many automakers that have tried to capture a share of the growing premium market in Europe have failed. Premium brand Nissan Infiniti has spent more than a decade vying for a foothold in Europe. However, falling sales forced Infiniti to announce in March that the company would stop sales in Western Europe to concentrate on the US and China.
The premium Lexus brand has been competing in Europe for two decades but remains a small player in the segment. Honda was wise not to bring its premium Acura brand to Europe.
Genesis GV70: compact SUV
It wasn't just Asian premium brands that struggled to establish their presence in Europe. The Fiat Chrysler Automobiles Maserati and Alfa Romeo brands, as well as the PSA Group's PS Automobiles, struggled to generate their sales volume.
There is one way a premium newcomer can get ahead of the competition in Europe. He should debut in what the competition lacks. “If you want to influence the German dominance, you must offer something different, special from a technological point of view,” said Munoz of JATO. He cited the recent success of Tesla electric vehicles in Europe as an example.
How the Tesla brand outsold Lexus, Jaguar and Alfa Romeo in Europe in March. This was due to high demand for the recently launched Model 3 midsize sedan.
Volvo is trying to follow the path of Tesla by betting big on its electrified Polestar marque. Hyundai will wisely hold back on the Genesis launch until it can provide cutting-edge technology. If this is not so, then in Europe the brand will face great difficulties.