Suffering Slow Sales in China
Hyundai Motor has been struggling in the Chinese market this year, continuing from last year. Hyundai Motor was relegated out of the top 10 in the Chinese passenger car market in February this year due to the rising competitiveness of local Chinese automakers and aggressive marketing by Japanese automakers based on a weak Japanese yen.
According to the Beijing Branch of the KOTRA on March 13, last year’s sales of Beijing Hyundai and Dongfeng Yueda Kia dipped 31.3 percent and 36.6 percent from the previous year to 785,000 units and 360,000 units, respectively.
According to a Chinese passenger car market data researcher, Beijing Hyundai Motor's sales volume in February fell 41.5 percent year on year to 30,800 vehicles, ranking 12th. Hyundai's market share in China in February was 2.52 percent, the lowest level since last March when the Korean automaker was hit by China’s retaliation against South Korean companies for South Korea’s deployment of the THAAD System. Beijing Hyundai's market share in China was 2 percent in March of last year but has hovered more than 3 percent since September. Earlier Hyundai's January sales in China also fell 6.2 percent year on year to 75,006 units. Kia Motors, meanwhile, sold 20,619 units in China last month, up 7.3 percent from the same month of last year.
Hyundai Motor's sales decline in China have been affected not only by a strong Korean won and a weak Japanese yen but also by a drop in the price competitiveness of its SUVs and the rapid growth of Chinese automakers, according to industry watchers. Beijing Hyundai Motor was out of the top 10, while Geely Automobile of China came in fifth. Seven, eighth and ninth places were also taken by Chinese automakers. Despite a 0.3-percent decline in car sales in China last month, Geely Automobiles sold 109,718 units in February, up 54.1 percent from a year earlier.
Japanese companies are also increasing their market shares in China based on a weak Japanese yen. Dongfeng of China and Dongfeng Nissan, a joint venture with Nissan closely trailed Hyundai Motor which ranked eight last February, jumped to sixth place in February this year. Guangzhou Honda also placed 10th.
As in Korea, competitiveness in SUVs is determining winners and losers in China. It is analyzed that Hyundai's small SUVs in China have weak price competitiveness. China's SUV sales last year exceeded 10 million units for the first time, running to 10.253,000 units. "China's rapidly developing artificial intelligence (AI) and information technology (IT) are also powering local automakers in China," an industry official said. “While quality gaps between foreign and Chinese companies have narrowed, in the market of SUVs on the upswing, Chinese SUVs are much cheaper than those of foreign automakers."