Seeking to Regain Market Share with EVs
Hyundai Motor Co. and Kia Corp. are enjoying strong sales in the United States and Europe. But the two Korean carmakers are struggling in the Chinese market.
Hyundai Motor and Kia sold a combined total of 249,233 vehicles in China in the first half of 2021. This is a 10.8 percent decrease compared to 279,403 units in the first half of 2020, according to data released by the China Passenger Car Association (CPCA) on July 18.
Compared to 416,684 units sold in China in the first half of 2019 before the COVID-19 crisis, their sales plunged 40.2 percent.
Hyundai Motor sold 187,639 units in China in the first half of this year, up 3.5 percent from 181,372 units in the first half of 2020, while Kia Corp. 61,594 units, down 37.2 percent from 98,031 units in the same period of 2020.
China's overall auto market slumped in the aftermaths of COVID-19 in the first half of 2020, but showed a clear recovery in 2021 with car sales totaling 8,279,469 units in the first half alone. The figure represents a 22.9 percent increase from 6,735,646 units in the same period of 2020 and is almost equal to the 8,466,633 units in the first half of 2019.
Hyundai and Kia’s sales in China have been on the decline since 2017 following the deployment of the Terminal High Altitude Area Defense (THAAD) system in South Korea.
Compared to the first half of 2019, Hyundai Motor's sales in China fell 31 percent in the first half of 2021 while Kia's sales plunged 57.4 percent.
As the global auto market showed a recovery, Hyundai Motor and Kia have been enjoying significant growth in the U.S. and European markets mainly with sports utility vehicles (SUVs) and eco-friendly cars, respectively, but they are struggling in China.
Hyundai Motor and Kia initially set 562,000 units and 255,000 units as their sales targets for 2021 in China. But it seems difficult for the two automakers to reach the goal at the current pace.
Moreover, they have been failing to get strong momentum as sales of sedans, which are their main models, plunged and lost leadership in eco-friendly cars to local Chinese companies amid the center of the Chinese auto market is changing to SUVs and eco-friendly cars.
As a result, Hyundai Motor and Kia have recently overhauled their organizations in China. Beijing Hyundai and Dongfeng Yueda Kia, local subsidiaries in charge of production and sales in China, were reorganized and placed under the presidents of Hyundai Motor and Kia, respectively. Thus far, organizations and personnel exclusively in charge of China independently operated their own businesses in China, but the two carmakers have changed it to support the Chinese business by mobilizing all of their headquarters' capabilities through the reorganization.
Hyundai Motor and Kia Corp. plan to lead the Chinese automobile market with a total of 21 electric vehicle models by 2030. Genesis' first electric vehicle model, the G80 electric vehicle model was unveiled for the first time in the world along with the Hyundai Motor IONIQ 5 and the Kia EV6 at the Shanghai International Motor Show in April. Genesis also launched a Chinese version of its brand.