Lenscap2

Interesting series of events...

http://www.autonews.com/article/2017...d-up-louisiana

"Genesis has suspended vehicle sales, service and marketing in Louisiana indefinitely, citing word from the state's Motor Vehicle Commission that Hyundai Motor America was not properly licensed to sell the luxury brand's vehicles in the state. The move sets up a battle between Genesis and its Louisiana dealers over whether this amounts to a breach of contract by the automaker. It also could have nationwide implications if other states' licensing requirements trip up Genesis, which Hyundai created in 2015 as a separate luxury company and brand, without setting up a separate U.S. sales channel."

"The problem arose in June when Genesis General Manager Erwin Raphael told Louisiana dealers during a conference call that Genesis' business model was changing and as a result, just two points in the state — ​ reserved for Baton Rouge and New Orleans — would sell the brand, down from 13."

"The move would have given the culled stores 30 days to remove signage, suspend marketing and sales and stop taking service orders from Genesis customers. Dealers on the call balked at the idea, according to Navarre, having spent tens of thousands of dollars to improve sales and service areas to Genesis' standards — and previously to Equus standards to be eligible to sell what was then the Hyundai brand's top-line car — and because of customers who would be left in the lurch. Besides, Reynaud said, the proposal wasn't legal."

"In the meantime, many affected Louisiana dealers are considering legal action against Genesis to recoup costs associated with floorplanning interest charges on the vehicles they are prohibited from selling as well as lost service income."

"Navarre, for his part, sees a more sinister motive behind Genesis' actions. With dealers facing potential Motor Vehicle Commission fines and legal costs for challenging the Louisiana ruling and Hyundai Motor America, "my opinion is that dealers will start saying 'These legal bills are so high so I'm just going to back off,' " Navarre said. "They'll either take some small settlement [from Genesis] and lose money on it or just get tired of fighting it." The end result would be Genesis reducing its dealer network — just as it has wanted, Navarre said. "It's mind-blowing," he said. "I've never seen anything like this in 25 years."

Toys4RJill

Sounds like Genesis is going to be a complete disaster.

I cannot believe Hyundai would screw up the licensing in that they could sell cars.

mmarshall

I'm not sure that Hyundai screwed up. Thus case shows several signs of harassment of the company on the part of the state. Hyundai and Genesis (including their francises) may have a civil case against the state for damages suffered because of the state's actions. That clearly differs from the problems that Tesla is having, which go beyond that, into the question of company-owned shops in states that don't allow them.

LexBob2

If there is a case to be made, I'm sure Hyundai's legal department or retained attorneys are working on a strategy

mmarshall

We'll see. The state, of course, by virtue of its legal position, has a bully-pulpit, and almost unlimited resources to fight in court...but, to an extent, so does Hyundai, being one of the largest corporations in the world. They can certainly afford good lawyers.

mordecai

mmarshall, always so quick to defend and praise Hyundai/Kia when it's so clear that in their rush to create this sub-brand, Hyundai did not do the necessary, proper diligence. Did you even read the article? How are you blaming the state for telling Hyundai they did not properly set up a license to sell Genesis-branded cars in their own state? Why should the dealerships be angry at the state for enforcing their own laws? The dealerships should have the right to be pissed and perhaps even sue Hyundai for making them invest in setting up their dealerships for Genesis when Hyundai did not even have the license to sell Genesis in the state.

Toys4RJill

Agreed. However, I will say, the dealers purchasing these Genesis franchises should of done their due diligence in making sure all the boxes were checked. I find it hard to believe that all parties involved allowed all of this to happen.

Sad day for the franchises. But Hyundai is to blame imo.

LexBob2

My guess is that we won't hear much more of this. Probably just a kerfuffle between Hyundai/Genesis and some department at the state of Louisiana.

mmarshall

I'm not necessarily a Fanboy...but I have a lot of respect for their products.


I did read the article....but I don't necessarily agree with your conclusion. The dealerships should not be p***ed at Hyundai, but at the state. I don't see any problem with Genesis products being sold in the state if their parent company, Hyundai, is allowed to sell Hyundais and Kias in the state. Genesis products are even sold out of (some of) the same dealerships as Hyundais That's like telling Ford they can't sell Lincolns (which they do out of selected Ford shops now).

But, then, again, neither your word or mine is the last one on the matter. Let a judge or jury decide, in court. I'm confident that Hyundai would win the case....but, then, hey, I've been wrong before.

bitkahuna

iTrader: (20)

let's keep personal comments out of this please.

oldcajun

I grew up in Louisiana and there is little that the state government does that would surprise me. When I read this, my first thought is that someone found a way to collect additional license fees.
Steve

FatherTo1

Maybe has something to do with Hyundai accelerating plans to have standalone Genesis dealerships:

https://www.yahoo.com/news/genesis-b...190000745.html