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Thursday, Apr 25, 2024

Genesis Opens First Brick and Mortar Dealership in California

Genesis’ new Santa Monica dealership marks the brand’s entrance into the West Coast dealership market and is the 15th location for longstanding local dealership group LAcarGuy, which owns and operates the Genesis facility.

Genesis Santa Monica
Genesis’ new dealership in Santa Monica run by LAcarGuy.

Genesis Santa Monica features a 30,000 square foot showroom with an open floorplan showcasing Genesis’s lineup of vehicles. It is the fifth standalone retail facility in the United States to open in the past year.

The Genesis brand is a luxury vehicle division of Hyundai Motor Group and was introduced in 2008. The first-generation Genesis drew rave reviews from the car community for its sophistication, refinement and competitive pricing. That version saw a second generation, which was produced from 2013-2016. Spurred by commercial success, Hyundai elected to spin off the Genesis name into a luxury brand in 2015. Now, with a dealership located in L.A.’s massive automotive market, Genesis is looking to capitalize.

“We are pleased to celebrate the continued progress we are making in redefining our retail experience as we open our first standalone facility in California,” Claudia Marquez, chief operating officer of Genesis Motor North America, said in a statement. “Opening a dedicated showroom in a key market like west Los Angeles represents a significant milestone for the brand. We are delighted to provide Santa Monica and the surrounding communities with a permanent home to discover Genesis.”

The grand opening of the new dealership was announced on March 30.

Car guy

Neither Genesis nor Hyundai own or operate the dealership. That role belongs to LAcarGuy Chief Executive Mike Sullivan, who said the size of Genesis Santa Monica, which is smaller than traditional dealerships, has enabled his company to be more creative with sales.

“Typically, a full dealership operation used to be on three to five acres,” Sullivan said. “What we’re seeing now is that those properties are too valuable in a development world where you can build apartment buildings for instance. So, we’re figuring out a way to be more efficient, to carry less inventory, to sell online and perhaps deliver at home.”

Mike Sullivan, chief executive of LAcarGuy.

Sullivan has been in the automotive business for 47 years, once partnering with his father to run the company and now partnering with his children.

“Genesis was offered to me three years ago, and I really didn’t know much about Genesis at that point,” Sullivan said. “One of the primary reasons that was especially interesting to me for Genesis in Santa Monica was their electrification program. I think it’ll just fit that west Los Angeles market (well), so we anticipate we’re running up the ranks for Genesis as far as their big electric dealers go.”

Genesis has three electric vehicles: the Genesis GV60, Electrified GV70 and Electrified G80, the last two having nonelectric versions.

According to data from the International Energy Agency, electric car sales in the United States increased from a mere 0.2% of total car sales in 2011 to 4.6% in 2021. The Bureau of Labor Statistics has attributed increasing electric vehicle adoption to factors such as environmental concerns, a wider range of vehicles, increased vehicle range and fueling costs.

‘Big positive’

Sullivan noted that setting up shop in Santa Monica was no easy task, but that the area’s affinity for electric vehicles was a big positive.

“Santa Monica is very, very tough to get into – there’s just not a lot of land and it’s very restrictive when it comes to building heights, density, etcetera,” Sullivan said. “However, after being there for 47 years, we have the ability to figure out how to get somebody in. (Genesis) wanted to be here because Santa Monica has a natural proclivity to go electric, which is exactly why I wanted them, so it was kind of an easy match.”

The Santa Monica location Genesis dealership is something Sullivan has had for some time, using it as a dealership for a number of different franchises. LAcarGuy spent million of dollars remodeling the location for Genesis, an option that Sullivan felt confident in as opposed to finding a new building. “That’s not what we do,” he said. “It’s just too expensive.”

“We have to run a balanced operation with new and used sales, parts and service and sometimes body shops” Sullivan said of his business. “It’s a very competitive industry with small margins so it’s imperative that we kind of excel at all those different levels. We’ve got to take every opportunity to have a small return, and that’s a model that makes sense.”

Sullivan’s business faced a significant downturn early in the Covid-19 pandemic before things turned around in 2021. However, he noted, challenges persist in the form of high interest rates and a microchip shortage.

“(The chip shortage) is better than it was, but it’s still absolutely an issue,” Sullivan said. “We were by no means going back into that old production cycle where the manufacturers have a three-month supply of cars, there’s not that kind of chip production. We certainly have cars in stock so we’re not in that sold-out capacity that we were once in, luckily.”

Genesis Santa Monica is the fifth of many planned standalone retail facilities for the brand in the United States.

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