Genesis dealers ask for more flexibility on facility upgrades

Genesis will consider granting some flexibility on its expensive Keystone facilities plan to dealers who were hesitant to construct exclusive storefronts for the young luxury brand.

Of Genesis' 270-dealership network, only two standalone stores opened in 2022 — one in Lafayette, La., and the other in Greer, S.C. There are 75 more in some phase of development.

At the brand's make meeting Saturday, Genesis Motor North America CEO Jose Muñoz told dealers that investing in the standalone facilities would help boost the customer experience and, in turn, sales.

"I requested openly for the dealers to be confident and invest in exclusive facilities," Muñoz told Automotive News outside the meeting. He noted that the dealers who did invest were seeing better customer service ratings as well as better sales and profits.

Though Genesis retailers are making progress on investing, the customer experience is still "not where we'd like to be," Muñoz said.

He said dealers responded: "Can you be more flexible with the Keystone program or maybe develop a new program or extend the [existing] program?"

Make meeting attendees also got a peek at the brand's growth plan through 2025. Peter Lanzavecchia, chairman of the Genesis National Dealer Advisory Council, said afterward that most dealers were impressed and "are now talking about more investment in facility and human capital."

Lanzavecchia's dealership Genesis of Cherry Hill in New Jersey is under construction and slated to open this summer. He said one of the major learnings of 2022 is that Genesis dealers will find more success when they do not use Hyundai staff to sell to luxury clientele.

"While we're required to have a dedicated staff in our new facilities," he said, "we are now updating that requirement to the dealer network to begin that split of the staffs now, while they're still in transition to the exclusive facility.

"What I've learned in my store is that until you split [the staff], you're not going to achieve the customer experience results that the Genesis client expects."

Genesis launched the facilities program in January 2020 before halting it during the height of the COVID-19 pandemic. It resumed six months later, but many dealers pushed back against pouring millions of dollars into brick-and-mortar storefronts, citing the migration to online shopping.

"Through what we've learned over the last couple of years," Lanzavecchia said, "a minor update might be really positive at this point."