Changing how we buy cars

And now here I am, on another flashy launch event for a new arrival in the premium space, this time Genesis. Like Infiniti, it’s the Nappa-leather-and-porous-wood arm of a Far Eastern mass market giant, in this case Hyundai, and like Infiniti it wants to steal a little market share from the likes of Audi the way Lexus was cleverly able to do.

As it transpires, the company’s UK managing director, Andrew Pilkington, believes three dealerships is the wrong number too, which is why he’s launching this new marque here with none. Genesis has a physical space in the Westfield shopping centre in Shepherds Bush, London, and it will have others in major UK cities soon. It calls them Studios and they’re designed like lounges in expensive hotels. But traditional dealerships with lots of shiny new cars, polished floors, a service centre out back and pushy sales staff? It has none now and it never will. That’s because Genesis is trying to change the way we buy new cars.

To do so, it’s shifting the experience almost entirely online. In its Studios, buyers will be able to mull over leather swatches and paint samples, and learn more about the cars. Instead of salespeople earning commission on sales, the Studios will be staffed by Genesis Personal Assistants, who’ll be salaried and not incentivised to hit sales targets. Genesis will bring a car to you should you want to test drive it. If you want to test another model, it’ll deliver that to you as well.

Next – presuming you liked the car enough to buy one – you’ll order your Genesis online. It’ll be delivered to your home or work on a trailer and when it’s due to be serviced, it’ll be collected and swapped with a courtesy car of the same model. There will be no haggling on price or phoning around looking for the best deal. Every Genesis will come with a five-year care package, including a full warranty, servicing (up to 50,000 miles) and roadside assistance.

The point of all this, says Pilkington, is that buyers have had enough of the haggling, the inconvenience of visiting showrooms time and again and the unclear costs of maintenance. It’s time, he thinks, for the whole buying and ownership experience to be reset; to be made both more transparent and more convenient.

‘We’re a disruptor,’ Pilkington tells me. ‘There are lots of good products out there but the traditional business model doesn’t meet the customer’s needs.’ He goes on to explain that buyers in this sector of the market are often time-poor, which is one reason his company’s approach – delivering new cars to owners and collecting them come maintenance time, rather than online sales specifically – will be so appealing to some.

I completely get it. My closest Alpine dealership is in Solihull, 92 miles from home. It means driving almost 200 miles to drop my car off each time it needs a service or some attention, then the same distance again later in the week to collect it. That’s a full working day lost each time.

Genesis isn’t the only debutante moving sales online and out of conventional showrooms. Polestar, for instance, will only sell you a car through its website, to be delivered to your home. (The pandemic could prove to be an accelerant as far as our online buying habits are concerned.) And like Genesis, Polestar has spaces in shopping centres where buyers can ask questions, feel seat fabrics, hold paint samples up to the light and learn more about the brand. Tesla does something similar.

Will established car makers be compelled to do the same? ‘Quite honestly I don’t think they can,’ says Pilkington. ‘They have their own distribution models with huge investments in facilities and processes. To change that they would need a completely different mindset.’

To some extent Tesla, Polestar and Genesis have their hands forced. Pilkington admits his company couldn’t have entered the UK in any other way, saying, ‘it is the only way for new brands to enter the market. The barriers to entry in the traditional model are so high. To find investors that would be prepared to put in a huge investment for just one dealership… You’ve got no used cars to start with and no after-sales business. All you’ve got is a new car sales model, but you don’t have brand awareness or recognition, you don’t have a natural demand, you’ve got to create that, and as a consequence, where’s your investor going to get the income to repay their investment? That’s the biggest challenge. It means any new entrant will have to come in with a disruptive business model like ours.’

Will all that be enough to turn Genesis into a new Lexus and not the next Infiniti? A decade from now, we should know the answer to that. But it’s worth remembering that Lexus built its brand in the west on the unprecedented brilliance of its first model, the 1989 LS400. That car, a rival to the Mercedes S-Class, was so much better than the European competition it sent shockwaves through the industry.

Genesis doesn’t have that, at least not yet. I’ve driven two of its cars, the G80 saloon and the GV80 SUV, rivals to the BMW 5 Series and X5 respectively. They start at £37,460 and £56,715. You’ll make your own minds up on how they look, but both are comfortable and refined, they have high-quality interiors, strong and quiet engines, smooth transmissions and bundles of comfort and convenience kit. They aren’t remotely sporting, but as luxury cars they stand up to the competition quite well. Genesis will launch eight new models in its first year, hybrids and full EVs among them.

Instead of disrupting through engineering, Genesis is hoping to disrupt the marketplace by redefining how buyers interact with a car brand. But will some added convenience and a touch more transparency ever be enough to persuade buyers out the BMWs and Mercedes they know and like, and into a new marque few of them will have heard of? It seems like the tallest of orders.

Established car makers will inevitably borrow certain practices from the likes of Genesis and Polestar. In fact, many already offer direct sales through online channels, but they are wedded to the traditional distribution method. Ferrari, meanwhile, tells me it has already improved its online configurator, enabling customers to fully explore the options available to them even before they’ve stepped out of their own homes. But its showrooms will stay. Indeed, visiting a Ferrari dealership should be a key part of the experience.

Already we’re seeing two distinct approaches beginning to emerge: new companies are going online only while more familiar names are sticking with the bricks, mortar, steel and glass they know so well. Eventually, one of these strategies will prove itself to have been better future-proofed than the other.