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Genesis cars win accolades, offer value — so why are sales so bad?

My high-school buddy Brent Cormier was so smitten with the Genesis G80 when he saw it at an event I hosted at SXSW in 2016 he bought a used 2013 Hyundai Genesis a short time later and fell in love with the car. "It surpasses my every expectation," said Cormier, a self-described "renaissance man" who owns and runs a real estate agency with his wife Laura, is a food service executive chef and part owner of Austin-based Thin the Herd Guitars. "I was locked into Mercedes and Audi for 10 years," he added. "And felt trapped in an endless pit of maintenance costs." After owning the Genesis over the past two years — including using it as an Uber and Lyft driver to earn extra cash — Cormier learned what some frugal luxury sedan buyers and a handful of car reviewers have discovered: Genesis offers great bang for the buck compared to other premium brands and can compete with the best in terms of performance, features and comfort. Hyundai's luxury brand also earned a prominent third-party endorsement last week when for the first time Genesis topped J.D. Power's 2018 APEAL study, surpassing German luxury-performance icon Porsche. The APEAL study (which stands for Automotive Performance, Execution and Layout) "measures owners' emotional attachment and level of excitement across 77 attributes," ranging from performance to comfort, and asks nearly 68,000 owners of new 2018 models to score vehicles on a 1,000-point scale. In its second year ranked as a stand-alone brand, Genesis earned an APEAL score that bumped it up 15 points to 884 and helped push it past Porsche — and past BMW, Lincoln, Mercedes-Benz, Audi, Volvo, Cadillac, Land Rover and Lexus, in order of ranking. Last month, Genesis also topped J.D. Power's Initial Quality Survey (IQS) for the first time this year. And both its models were awarded Top Safety Pick Plus ratings by the Insurance Institute for Highway Safety, among 11 Plus ratings in all for Korean vehicles. Despite high J.D. Power rankings and great reviews, Genesis U.S. sales were off 50 percent for the first six months of 2018 compared to 2017, and in June Genesis sold only 796 vehicles — the first time U.S. numbers dropped below 1,000 in a month. Part of Genesis's APEAL and IQS success can be attributed to its small product lineup: just two models, the G80 and G90 sedans, with a third, the 2019 G70, launching later this year. And while those numbers may help in J.D.

Lexus LX to get diesel engine?

Australian consumers appear poised to get another diesel-burning luxury SUV in the near future, and word is it's coming from Lexus, of all automakers. Sean Hanley, chief executive of the company's branch in Oz, recently told Aussie website Drive that he's "pretty confident" that the new engine for the LX is getting the green light.
Like in the US, the LX in Australia is currently only offered with a 5.7-liter, gasoline-burning V8. However, sales of the big SUV are presently minuscule Down Under, with Drive reporting just 153 LX570s sold in all of Oz last year. Hanley is negotiating with Japan to get the new diesel in hopes of boosting flagging sales. If his efforts are successful, it would be the first diesel engine offered in a Lexus there. Hanley didn't specify exactly which mill the SUV would get. However, given the LX's close relationship with Toyota Land Cruiser, the diesel 4.5-liter twin-turbo V8 already available in the Toyota in markets outside of North America seems like a natural choice.
Don't expect the variant to be hopping across the Pacific, though. Lexus spokesperson Allison Takahashi tells Autoblog she has heard "nothing" about an oil-burning LX coming to the US. That's not a huge surprise, though, because neither Toyota nor Lexus offer any diesels in their lineups today. Also, Lexus has only sold 1,981 LX570s through June, which only placed it ahead of the LFA supercar in the brand's sales. It's probably just not worth certifying the engine for such a low-volume model.

Lexus in no hurry to be a big player in China

For a while now, China's spiraling wealth, population and development has had the world's luxury automakers in an expansionist fervor, with many executives exhibiting the sort of gleefully maniacal behavior historically reserved for gold-rush prospectors. Yet Toyota, of all companies, is exercising a surprising amount of caution in the Asian nation.
As The Wall Street Journal notes, Toyota's premium brand, Lexus, sold all of 64,000 vehicles in China last year, while BMW cleared its books of 326,000. In fact, it didn't even bother entering the market until 2005, while rival Audi built its first car in the market a decade and a half earlier. Even now, Lexus doesn't build any vehicles in China, and with the country's notoriously high tariffs on imports, that's a major disadvantage. Yet the business daily quotes Lexus executive vice president Mark Templin as saying that the brand is nowhere near ready to start building cars in the market. "We're not having those discussions about when we're going to go to China... We have a lot of work to do before we get to that point."
Part of that work includes establishing a more expansive dealer network - Lexus only had 99 stores as of 2012, while rival Mercedes-Benz had over two-and-a-half times as many, and it's still expanding. Adding a lot of dealers without having a goodly number of competitively priced offerings for them to sell may seem like an odd strategy, but Templin tells the WSJ that the goal is to "cultivate our image for quality and customer service and let the customers that we have go tell that story for us."