History is replete with examples of success and failure in the luxury segment.
Spinning off a luxury brand is a big investment for any automaker, and it requires the right combination of product, patience, and timing to pull off properly. Charming a new set of potential customers with an unfamiliar brand isn't easy, even when you can evoke a little bit of heritage in the process (which most automotive luxury spin-offs can't).
History is replete with examples of success and failure in the luxury segment, and with the new Genesis brand from Hyundai standing as the latest attempt for a mainstream company, there are lessons to be learned as a student of the past. Here are three luxury brands that made it, and three that didn't, when pushed out of the nest by their respective corporate parents.
There's no bigger carrot to tempt car companies seeking to profit off of a new luxury division than what Toyota has accomplished with Lexus - and indeed, that's the very brand that Hyundai is using as a basic model for its Genesis campaign. Not the first Japanese premium brand to make it to the North American. market - that honour fell to Acura, three years earlier - Lexus still faced an uphill battle among customers not used to paying luxury prices for an import that crossed the Pacific, and not the Atlantic, before settling in U.S. and Canadian showrooms.
It certainly helped that the first olive branch offered by Lexus was the LS 400, a full-size sedan six years in the making. With the full engineering resources of Toyota at its disposal, the Lexus LS 400 was an exceptionally well-built automobile that still prowls second-hand car lots 25 years later, which is an unusual accomplishment for an 80s luxury rig. The LS was quickly followed by the ES, and by the end of the decade a pair of SUVs would round out the line-up, with the RX crossover quickly becoming Lexus' best-seller. Well priced to undercut the competition for the first 10 years of its existence, Toyota has been able to slowly ratchet up the MSRP of its Lexus offerings to generate handsome profits.
Despite being first, as noted above, Honda's in-house Acura brand never quite soared to the same heights as Lexus. The company did get off to a strong start, however, and produced notable offerings like the Acura NSX supercar and the Acura Integra compact car, accomplishments that were never matched in either adulation (the NSX) or popularity (the Integra had no Japan-sourced small car peer) by their rivals. Rather than the insulated cruising strategy employed by Lexus, Acura instead spent the first half of its existence pursuing sporty handling and technological development, a plan that would eventually be abandoned as the company settled into a more affordable re-badging practice that would focus on existing Honda platforms.
Sales of Acura have slowed over the course the last 15 years or so, with the automaker's original identity fading into the background as it fields a shrinking line-up of comfortable, but largely unremarkable cars to be sold to a faithful cohort of repeat buyers. Still, even at half the yearly volume of Lexus, Acura remains the second-most successful luxury spin-off in North America.
Of the three most popular luxury upstarts to make it out of Japan, Infiniti is the brand that perhaps flew closest to the sun. After a muddled start in 1990 that saw the popular Q45 full-size sedan joined by an unusual collection of cars - the M30, the J30, and the G20, each of which struggled to interest customers - Nissan tagged Infiniti to present a sporty face to North American buyers and tackle the market share traditionally reserved for BMW. Revised marketing campaigns and a whole new line-up of cars in the 2000s, including the G sedan and coupe, as well as the unusual high performance FX crossovers, helped makeover Infiniti's image and separate it further from its Nissan roots.
Infiniti has never been able to match either of its Japanese luxury spin-off competitors in terms of overall sales, but it has managed to deliver a number of memorable cars during its quarter-decade of existence, and Nissan continues to stay the course. Like Acura, however, it's been difficult for the brand to truly break out and create an image that resonates with premium buyers.
Chances are, the name "Maybach" means nothing to you. This failed luxury brand from Mercedes-Benz likely never landed on the pop culture radar outside of a few appearances in music videos during its brief revival in the early 2000s. Mercedes-Benz made a number of mistakes in rolling out the Maybach line, including the assumption that the hundred year old nameplate would resonate with ultra-wealthy buyers seeking to drop between $300,000-$500,000 on a car. Lacklustre styling and strong competition from established marques Bentley and Rolls-Royce saw a mere 3,000 examples sold over nearly a decade of production.
A new effort to breath life into the Maybach concept is currently underway, with the "Mercedes-Maybach" appellation to find a home on specific versions of the Mercedes-Benz S-Class. It seems like an unusual decision to dilute such a strong brand - the S-Class - with a name that has never captured the attention, or the dollars, of the well-heeled customers the German car company is after.
A luxury brand spun-off from a military-spec SUV? Remember, timing is everything: GM's decision to leverage the go-anywhere, ultra-rugged image of the Hummer H1 by way of a family of look-alike models (the H2 and H3) based on more pedestrian platforms was fully informed by the sport-utility craze that was surging through the industry by the year 2000. In some ways, the failure of Hummer to survive the General's 2009 bankruptcy was out of its hands, as high fuel prices and a reputation for anti-eco excess (fully encouraged by the brand's messaging and image) made it an unpalatable hold-over for the "new GM." Hummer never managed to match GMC's Denali when it came to luxury truck sales, and there was simply too much negativity surrounding the brand for it to survive the intense scrutiny of the taxpayers who had bailed out GM with their hard-earned dollars.
Is it possible for a luxury brand to be viewed as a failure if it's never really been given a chance to succeed? Alfa Romeo isn't technically a "spin-off," as the company has a long and storied history of selling cars worldwide. However, as part of Fiat Chrysler Automotive, its re-launch in North America after a prolonged absence has been fraught with missed opportunities and lost momentum.
First, the Alfa Romeo 8C coupe teased high performance fans with a handful of examples, followed by the slow-selling, compromised, but fun 4C coupe and convertible. All the while, planned sedans - such as the Giulietta, and the Giulia - failed to materialize as anything other than auto show platform spinners, with FCA back-pedalling on launch dates and general availability. Even if you did want to buy an Alfa Romeo, most people would have no idea where to find a dealership, which is not the best situation to find yourself in when trying to establish a premium beachhead in Canada and the U.S.