7:04 am, March 1, 2023
Genesis has revealed plans to build a dealer network as it seeks to boost sales and brand awareness in the UK.
Since launching in the UK in 2021, the Korean premium brand has only operated experience centres in shopping centres called ‘Studios’, and sold cars purely online.
But now the company has revealed it’s on the hunt for potential dealer partners to create a retail network, due to be operational from early next year.
Speaking to Car Dealer, Genesis Europe managing director Lawrence Hamilton said the decision to create showrooms was part of the next stage of the brand’s expansion.
He said: ‘Phase one was about coming to Europe and establishing a luxury car brand – we came with some very strong ideas about customer experience and a product portfolio direction, and wanted to see how it was received. And the answer so far is that it’s been very well received.
‘Phase two is where we really roll out Genesis by recruiting retail partners to help us expand the footprint of the brand.’
Genesis already has ‘Studios’ in London’s Westfield shopping centre and Battersea Power Station, with another in Edinburgh, Scotland, due to open soon.
However, Hamilton said the company wants to ‘supplement’ these ‘high street’ facilities with dealer-run showrooms that give ‘operational capacity in a more traditional way’.
The new sites will be relatively small and feature a showroom that can display around five cars, and offer aftersales and used car operations.
Genesis has begun consultations with potential dealers to partner with – they’re a mixture of large PLCs and smaller operations with a proven ‘track record’.
‘Large dealers groups are definitely on the list but we have to have a balance,’ he said.
‘We’ve started by looking at our Hyundai dealer network and the investors they have. We have a number of them that we’ve started a conversation with, and we’re going to go and have a chat about this new business model.
‘We’re only talking to people that have the scale and a good track record on customer experience – that’s the key thing.’
He added: ‘We could find people who will quickly build a showroom, but the question is are they focused on doing it in the way that we need.’
Genesis launched in 2021 with a pledge to offer personalised customer service, transparent pricing and online car sales.
It’s these services which the company feels makes it different from other premium car brands.
Last year it sold 1,000 cars in the UK.
Agency sales?
When asked if Genesis would be creating agency agreements with dealers for the new showrooms, Hamilton was coy.
‘We’re designing a commercial arrangement around what we need to deliver as a brand – so I wouldn’t label it at this stage as an agency agreement in the way that I think other people may look at it,’ he said.
He added: ‘It’s bespoke to what we require, and what we require is something that will deliver on our customer experience promises and the areas that we have already tested, namely the ability to operate remotely, to deliver omni-channel and serving the customer in any way they want.
‘There are three stakeholders and everything has to be in balance otherwise it won’t work,’ Hamilton explained.
‘Stakeholder one is the customer – they have to know [when they come to a showroom] they are going to have a great experience and that we are going to deliver consistently on what we promised them, because they are coming to us because they want a better experience and for the product portfolio we have.
‘The second stakeholder is the retail partner. They have to be making a good return and understand that the investment is balanced, understand the direction of the brand, and be willing to operate and deliver on it because the return is there for them.
‘If they have the return they’re going to be able to invest in providing the customer experience, which of course brings the return because there’s no return without the customer.
‘And thirdly, us as the OEM, it’s critical for us that we get something out of this arrangement.
‘If we’ve got good retail partners, we then have a consistent brand position to build brand value and loyalty.
‘If all these three things are in balance, we’ve got a winning business.
‘So it’s not an off-the-shelf agency model discussion, but built purely around how do we get this balance into this equation.’
No U-turn – it’s the next step
Hamilton refuted the idea that the change from being a purely online brand to a company that is now investing in physical locations is a U-turn.
‘I would argue we are making it better,’ he said.
‘We’re not backing away from online sales – they are here to stay.
‘The fact that the vehicle may well be ordered and delivered to the customer with the help of a retail partner doesn’t change the fact that the online customer experience is still there.
‘The retail partner is an essential part of the logistics and last mile experience. We are using retail partners to improve the process.’
Hamilton added: ‘We recently launched our Battersea Power Station Studio and the facility is attracting an enormous amount of interest. We are capitalising on thousands of people every week who have never heard of Genesis before.
‘Strategically placed Studios have a fundamental tool in our marketing box. Their role will continue to be very important, very pivotal, so I wouldn’t rule out more Studios at some point.
‘So I’ll refute your cynicism slightly, but with a big smile on my face and say, actually, I think we are building.
‘We wanted to come in carefully, we wanted a proof of concept, and we wanted to know whether we were doing the right thing.
‘It’s time to make Genesis more visible and more accessible.’
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