In 2016, a planned European launch for Hyundai’s Genesis brand was postponed due to the brand lacking SUVs and crossovers in its lineup and its lack of diesel engines.
With diesel sales crumbling throughout Europe the lack of suitable diesel engines is no longer an impediment. Likewise, the launch of the GV80 full-size SUV in late 2019 with the compact GV70 SUV following in Q4 2020 has seen another barrier to success removed.
However, achieving success in Europe will not be plain sailing. The market’s dominated by the German premium trio of Audi, BMW and Mercedes-Benz, while Volvo and Jaguar Land Rover also have appreciable share in Europe. We can add Porsche into that mix too – its product proliferation in recent years has seen its sales rocket from the tens of thousands a decade ago to just over 270,000 last year.
The existing players will not cede share to Genesis easily. Others have tried and failed in Europe in the past. Most recently Nissan’s Infiniti brand is a case in point. Its arrival in Europe was heralded by ex-CEO Carlos Ghosn at the 2008 Geneva Motor Show with the promise of a serious assault on the European market. Fast forward 12 years and Infiniti announced its exit from the European market. Its exit came after selling just over 55,000 vehicles over the period and with a highpoint of 13,775 registrations in 2016.
Even Lexus, Toyota’s long-standing premium brand, has struggled for traction in Europe with the brand’s market share consistently at less than 0.5%.
A lack of heritage is often cited as the reason behind the failure of upstart premium brands to break the stranglehold of Europe’s established order. Try telling that to Alfa Romeo (or indeed Lancia, Cadillac or Saab), which has persistently faltered after innumerous relaunches over the years. The established order are formidable competitors, heritage or not.
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By GlobalDataWhat could be different for Genesis? One thing is the focus on electric vehicles, which will attempt to ride the wave of Europe’s burgeoning demand. Battery electric vehicle share nearly tripled in West Europe between 2019 and 2020 with share increasing from 2.5% to 6.52%. In the first quarter of this year share was on the rise again, this time to 7.12%. One thing that has scuppered alternative premium launches in the past is customers’ unwavering brand loyalty to the established brands. In a hot new area like electric vehicles there may be less stickiness encountered in the market place. Genesis is launching first with an electric G80 with two more BEVs following in short order. The traditional ICE market will not be ignored though – the brand is said to be planning to offer both traditional and electric variants.
Another factor in its favor could be the styling of its vehicles. Put simply the Genesis models look sharp and premium. Design is headed by Luc Donckerwolfe, former design head at Bentley, Lamborghini and Audi with Genesis models following many design cues from Donckerwolfe’s stint at VW. Within the Hyundai stable we’ve already seen the impact good design had on the rather moribund Kia brand when former Audi designer Peter Schreyer took charge of Kia design in 2006.
These two factors could be enough for Genesis to be a success in Europe. However, it would be unwise to bet against the German hegemony seeing off yet another contender just yet.
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