Currently reading: How Genesis hopes to take on Lexus
Car firms are increasingly finding the idea of going premium attractive; will the latest entrant be able to make it?

Audi, BMW and Mercedes-Benz dominated the premium market again in 2021, accounting for 56% of global premium market sales and 20% of the total new car market in the UK.

Beyond the German trio, market analysis company Jato Dynamics lists 27 other car brands trying to match their success, including Lexus and Genesis. 

Taking on Lexus

Not all have achieved success, most notably Nissan’s premium brand, Infiniti. It had big plans but went largely unnoticed, and while it still exists in some global markets, it’s long gone from the UK.

Nissan really wanted to take on Toyota’s luxury brand, Lexus, which had one of its best years in the UK in 2021, selling 13,878 cars, almost 9000 of which were its latest UX and NX crossovers.

The brand, whose name comes from Luxury Export to the US, lost ground early in the 2010s, but its successful dedication to hybrids has enabled it to bounce back.

Like Toyota, Lexus is now heading into the world of fully electric cars, with Lexuses shown as part of Toyota’s vast 16-model EV concept reveal in December.

Last year we saw the arrival of what could be the biggest threat to Lexus, though: Hyundai’s newcomer, Genesis. Its saloons and SUVs have already impressed, and it has its first electric car coming this year.

It only really started trading in September, with its biggest seller so far being the Genesis GV70 SUV.

The way that many people interact as consumers has changed during the pandemic, and this could benefit Genesis’s direct-to-customer approach. It uses a combination of showrooms that it calls Genesis Studios and online tools – but will it survive where Infiniti couldn't?

Andrew Pilkington, director and regional operations manager at Genesis Motor UK, is confident that the brand has a very different business model.

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“We're not talking about sub-premium, we're talking about a premium product, a premium price product and excellent value for money,” he told us.

“We're talking about a luxury experience where we put the customer at the centre of the business, not actually putting the car at the centre of the business.”

Making the customer the focus rather than the car is a different strategy to many rivals, and Pilkington is confident that 2022 will be a strong year for Genesis, which is the top premium player in its home market of South Korea.

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“I think that 2022 is a really important, pivotal year for us in terms of the Genesis brand, with electric vehicles and greater awareness of Genesis and the Genesis difference, so that's our key opportunities in 2022,” he said.

Premium in segment 

It will also be a key year for Seat’s premium brand, Cupra.

It has a bit of a head-start, having been a name on Seat’s sportiest models for years, but it’s now a brand in its own right, and a spokesman for Cupra UK told us that it sits between the mass market and the traditional premium segment. That makes it more premium compared with Seat than actually premium, perhaps.

With 55 dealerships, it sold 7700 cars in the UK last year, 80% of which were its Formentor hybrid crossover.

Electrification is key to its future agenda, and the imminently arriving Cupra Born electric hatchback will go up against some strong electric rivals, not least of all others from within the Volkswagen Group, such as the closely related Volkswagen ID 3.

Another brand that is tackling the premium challenge is Stellantis’s DS, born out of the Citroën stable and again one that's premium in its segment.

Jules Tilstone, managing director of DS in the UK, told us that the brand has a clear purpose within the Stellantis group to bring in premium customers that otherwise would be looking elsewhere.

However, its best-seller in 2021 in the UK was the DS 3 compact crossover, essentially the latest version of a car that once wore the Citroën badge.

Tilstone is adamant that growth will come this year, especially with its plug-in hybrids and EVs as it heads towards becoming a fully electric brand from 2025.

“In the first quarter of 2022, we will build on this success and double our range, starting with the DS 9, our E-segment saloon and new flagship for the brand, closely followed by our C-segment hatchback, the DS 4,” said Tilstone.

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It remains to be seen just how much impact DS can actually make.

Felipe Munoz of Jato Dynamics is of the opinion that DS is a brand still trying to find its identity, saying that while the idea is good and it's well positioned in markets such as China, in the UK it might not have the image to really gain traction in the premium market.

When it comes to premium, image can be everything.

Breaking the loyalty cycle

Buyers in the premium segment can be fiercely loyal, as evidenced by the sales for Audi, BMW and Mercedes, but is there space for others?

Some brands have been rumoured to be eyeing up the UK. Honda has Acura in the US, but it’s unlikely that would ever cross the pond. Then there’s Lancia, but a spokesman for Stellantis told us that DS ticks its premium box and there are no plans to bring the storied Italian brand here. Chinese giant Geely already has Volvo and Polestar in the UK, but it could be looking at launching some of its other brands here too, such as Zeekr.

There’s a huge amount of brand loyalty in the premium segment, and while many of the car makers are keen to get in on the act and use the higher profits available to offset the increased costs of electrification, it’s not an easy nut to crack.

For any premium challenger to succeed, it needs to have a strong angle. Lexus has its hybrids, Volvo has its safety and Tesla is the cool kid on the electric block. Any newcomer really has their work cut out for them.

Mark Smyth

Join the debate

Add a comment…
Andrew1 14 February 2022
The only attractive car in that list is the DS4.
Marc 14 February 2022
This guy appears to have Gerry McGovern tourettes, he keeps feeling the need to continually spout out the word "premium".
ianp55 14 February 2022

Hyundai do have high ambitions for Genesis and they have the deep pockets to take the long view,to them the UK is a very minor market but Europe could well be more receptive to their cars. Stellantis has a different problem too many "premium brands",it's got Alfa Romeo, DS ,Lancia & Maserati Surely as Lancia has been run down to one model,DS has not been a great success plus the latest DS9 is only built in China, is it time for these model ranges to be culled '  

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