Brand recognition is one of the most important asset for any company. It takes many decades and many billions to build it and maintain it. For a luxury brand, brand recognition is even more critical and without it, cannot exist. "Value" or "bang for the buck" is irrelevant in the luxury market. People/companies dumping 6 figures on a car are not looking for value but for the prestige that comes with the product.
Think about it...if tomorrow Timex makes the best and most beautiful watch in the world under a new brand called for the sake of the argument "Phoenix" (no one really heard about it) anyone imagines that rich people will flock to buy it instead of a Rolex or whatever other established luxury brands they know of and usually buy? Not a chance in the world IMO... The association with a brand you buy from Walmart (assume they have ever set foot in one) will last forever...
Mercedes, BMW, Bentley, RR, etc never made made mainstream cars mind you start as a spin-off from mainstream.
Just look at all other mainstream manufacturers with spinoff luxury brands...Acura, Infiniti... They have never managed to dethrone the Germans after decades. Lexus got closer because they also had exceptional products backed by Toyota's recognized reliability reputation, but even for them it was/is tough.
On the other hand, true or not, in most people's mind Hyundai is still associated with value rather than anything else. Hyundai's press in recent years is not exactly favorable either.
Us here know about Genesis and the fact that they make good products, but probably 99% of the rich people most likely don't know and don't care and this is what makes it or break it.
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I agree with this. If the goal is to get a share of the top tier luxury market though, you need to start somewhere, and I think Genesis understands the mission; distancing themselves from the trainwreck that is Hyundai being an important piece of that. They need an 'in' though...something groundbreaking that gets the brand on the radar of their target audience, and that's what they haven't found yet - and quite honestly, that's the difficult part.
Lexus has come the closest, maybe even to some degree they're there. However, I think there's more to the Lexus story than simply entering the market with a terrific product, which they did, but also what the competition was doing. When Lexus came on the scene in the late 80's/early 90's, Cadillac, who previously enjoyed a massive share of the luxury car market, was absolutely bleeding customers. They had properly fubar'd the whole 'downsizing' thing, and totally lost their core market, while failing to attract the new younger demographic that they wanted. Their share, and to some degree Lincoln's who hadn't screwed up as bad but were still flailing around, was up for grabs and Cadillac's customers were shopping around; and Lexus was there with a car that was a lot more like what Cadillac should have been building. When Cadillac finally got their act together and started building the right cars, the NorthStar fiasco kept them down and Lexus kept growing.
So, I don't think Lexus did much to take buyers from the Germans...I think their success was pulling the more traditional luxury buyers away from Cadillac/Lincoln. That was their 'in'.
Unfortunately for Genesis...The German's are pretty good at not totally screwing up their fleet and losing their clientele, and Cadillac/Lincoln don't have enough share (excluding SUVs and limo fleets) to steal.
