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What Causes A Luxury Brand To Fail?

Illustration for article titled What Causes A Luxury Brand To Fail?

With the new Genesis brand, Hyundai will be making its first full-on foray into the luxury car game. There’s a lot to be gained if they do this right, and a lot to lose if they don’t.


The risks are higher for luxury brands. The competition is tougher. Buyers expect more. The automotive graveyards are full of the bones of brands who have tried and been found wanting, for various reasons.

So let’s give Hyundai some free advice on what not to do: how does a luxury brand fail?


Let’s take Mercury as a recent example. (Remember Mercury?) Even with a decent Ford portfolio backing them up, Mercury’s products weren’t different enough from their plebeian siblings and not competitive enough with other brands to really cut it. Ford seems to be trying a little harder with Lincoln these days, but it’s still mostly irrelevant in the grand scheme of things.

How does Hyundai avoid the mistakes that other companies have made?

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The Dealerships.

You used to go buy a Caddy at the Chevy-GMC-Buick-Chevrolet-Pontiac-Hummer Dealership over by that highway. When Caddy was really just selling rebadged crap, that made sense (although buying one really didn’t, that’s another story).

But then the cars got a lot better and the dealerships didn’t. And sales didn’t get much better either.

Now Cadillac is spending a lot of money making ‘boutique dealerships’. And sales have been steadily improving.