Genesis crucial in boosting Hyundai Motor loyalty
With the Korean automaker's product portfolio expanding, its popularity among repeat buyers is growing - especially those in the luxury market.
S&P Global Mobility's 27th annual Customer Loyalty Awards earlier this year highlighted Hyundai Motor Group's leapfrogging of its rival multi-line automakers into second place - hot on the heels of perennial front-runner General Motors. A key reason for Hyundai's success: Its surging Genesis luxury brand. And that second-place standing has continued through the first half of 2023.
In 2015, though the Hyundai and Kia brands' combined U.S. registrations were strong at 1.39 million, its customer loyalty was a middling 55.2 percent. The Genesis brand had just launched, with no SUVs in the lineup. Fast forward to calendar 2022 and not only had Hyundai-Kia U.S. sales increased to 1.45 million - despite pandemic-related shortages affecting all automakers - you can tack on another 56,140 sales for Genesis. This combination of brands has resulted in loyalty skyrocketing to 62.3 percent in calendar 2022, while industry average loyalty has fallen during the recent pandemic period.
Hyundai Motor Group has been able to do this without a full-size pickup truck that is a traditional loyalty stronghold, said Vince Palomarez, product management principal for market reporting with S&P Global Mobility.
When it comes to customer loyalty, the quality and appeal of cars is a huge factor. However, the breadth and depth of the product portfolio is equally important. As customers' needs change, any brand with enough selection to support that evolution will find greater success at retaining loyalty. Hyundai Motor Group is doing so, even though it has only recently moved into areas like luxury vehicles and the Large SUV segment - segments where rival Asian automakers have competed for decades.
"By offering Hyundai, Kia, and now Genesis, Hyundai Motor Group has shown it can attract new owners and keep them," said Tom Libby, associate director of loyalty solutions and industry analysis for S&P Global Mobility. "This opens up more options for a household that has the means to move up to a luxury vehicle, to stay within the corporation in a way that did not exist before Genesis."
The name "Genesis" first appeared on a Hyundai product in 2003, on the Concept Genesis, and then was applied to a production car on the Hyundai Genesis Coupe in 2007. However, the Genesis brand didn't appear as a standalone until the 2016 Genesis G90 sedan, followed by the G70 and G80 sedans, and more recently the GV60, GV70, and GV80 SUVs - with MSRPs stretching up to $98,700 for the G90 E-Supercharger.
"The credibility and competitiveness of Genesis has really gone way up, I think partially because of the competitiveness of the Kia and Hyundai brands," Libby said.
"You can really see the evolution of this brand as they've sold that initial product, brought those customers in, and kept improving the quality," added Palomarez. "The Genesis brand should only help them going forward, increasing that loyalty and presence in the industry."
Add to that existing corporate lineup a series of compelling EVs across all three brands based on the company's E-GMP platform - including the Hyundai Ioniq 6 sedan and the Genesis GV60 SUV - and Hyundai has the product picture to ensure its loyalty will stay on the rise.
Can Hyundai Motor Group keep it up? Through the first half of 2023, Hyundai was still in second place behind GM, with its loyalty dipping slightly to 60.5%, just a shade ahead of Ford Motor at 60.4%.
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.