Genesis sales jump with more dealers

LOS ANGELES — Genesis is finally seeing light at the end of the tunnel after its efforts to establish a dealer body separate from corporate parent Hyundai — and sales are soaring, a top executive said.

In the U.S., 318 Genesis dealers are open and selling cars after months of working through the paperwork and other regulatory hurdles to get their dealer licenses, Genesis Motor America COO Erwin Raphael said.

"We think that number might top out at 340, but the remaining 22 or so tend to be in very, very small markets, so we don't see them as impacting the overall volume," Raphael told Automotive News.

Leading the sales recovery is the G70 compact sedan launched late last year. While Genesis sold just 408 of the award-winning sports sedans in the fourth quarter, U.S. deliveries rose to 2,231 in the first quarter of 2019.

Raphael expects them to be at least 60 percent higher than that in the current quarter.

Overall sales for Genesis were 4,202 in the first quarter, down 3.7 percent from a year earlier, when there were just two nameplates, according to the Automotive News Data Center. But through May, the brand's sales were up 26 percent, to 8,120.

"There was a time when many dealers were complaining that customers wanted the [G70], but they didn't have inventory. So we had some inventory constraints; we had some regulatory constraints relative to their licenses," Raphael said.

Now with dealers up and running and better inventory this year, the G70 is responsible for more than half of the luxury brand's sales in 2019.

Raphael said he expects G70 sales to continue rising beyond the second quarter.

"Obviously, not at the same rate," he said. "But we do expect continued growth. There is still significant demand for the product."

To expand its lineup, Genesis will have its three-row crossover, which is about the size of the BMW X5, on sale next summer, followed by a compact crossover based on the G70 platform, Raphael said.

"We're focused on those two right now," he said. "We think there is a market for something smaller. We think there is a market for something larger, but we're not necessarily going to go into every market that's out there."

In addition to good news regarding its dealer body and growing sales, Raphael said Genesis was celebrating its top spot in J.D. Power's 2019 U.S. Initial Quality Study

The brand has been No. 1 for two consecutive years and in the top two for all three years of its existence.

"There are a lot of elements to it," he said.

"It begins with the engineering specifications and design. That's the lion's share of it: great designs, meticulous manufacturing. Rest assured, we still think that we can get better at launch, but that's really what's driving it."