Double Digits
Hyundai Motor Group, which re-entered the Japanese market last year after 13 years, faced difficulties again. Starting with the IONIQ 5, a dedicated electric vehicle that received favorable reviews in the global market, it knocked on the door of the Japanese market again, but it has not produced any meaningful results.
Hyundai Motor Group sold a total of 162 units in Japan in the first quarter of this year (January to March), according to the Japan Automobile Importers Association (JAIA) on April 1. Compared to 39 units in the same period of 2022, its market share increased by 415.4 percent to 0.20 percent from 0.05 percent.
The Hyundai Motor Group sold a total of 526 units in Japan in 2022. Average monthly sales were 44 units and all of the monthly sales units were double digits except for September when 147 units were sold. The Korean automaker promoted sales of the IONIQ 5 and the hydrogen fuel cell vehicle Nexo, but charging problems made the Nexo an unpopular model.
Hyundai Motor entered Japan in 2001 but had to withdraw in 2009 due to sluggish sales. Hyundai Motor has sold only 15,000 cars in Japan. However, in January of last year, 13 years after the withdrawal, Hyundai Motor Company saw the growth potential of the electric vehicle market in Japan and set foot again in Japan.
Hyundai Motor changed the name of its Japanese corporation from Hyundai Motor Japan to Hyundai Mobility Japan, and began targeting the market by holding exhibitions and test drive events in major regions of Japan. In addition, the Korean carmaker adopted a one-stop online sales method and introduced a subscription service in cooperation with a local car sharing platform.
However, these efforts have not paid off. Japan’s unique closed car market, driving environments different from those of Korea, brand recognition and prices acted as barriers to Japanese consumers’ purchases, analysts say. They add that the strategy of selling the IONIQ 5 for commercial use also had an impact.
Compared to Korea, Japan has narrow roads and small parking spaces, so Japanese consumers have a strong preference for compact cars. Some old parking lots can receive only compact cars and sub-compact cars. According to Jato Dynamics, an automobile industry analysis agency, sales of compact cars in Japan last year were 1.17 million units, down 4 percent from the previous year, but their market share climbed by 0.7 percent to 34.1 percent.
While Hyundai Motor Company is struggling, China’s BYD, the world’s No. 1 electric vehicle seller, is closely trailing Hyundai Motor. BYD sold 159 units in Japan in the first quarter of this year.