To Expand Presence in Chinese Market

Hyundai Motor Group is planning to produce electric vehicles (EVs) in China.

Hyundai Motor Group has reformulated its strategy for the Chinese market. It is planning to produce electric vehicles (EVs) in China and introduce high-end models and brands such as the Genesis in the Chinese market to expand its presence.

In China, Hyundai Motor Group has been caught between high-end European brands such as Mercedes-Benz and BMW and low-end local brands. In 2016, it posted 1.14 million units in sales and a 7.35 percent market share in China, but its sales performance dropped sharply to 780,000 units in 2017 and 385,000 units in 2021. The group's first factory in China, Beijing Factory 1, was sold to a local automaker and its Chongqing factory was shut down.

Some analysts blamed the group's poor performance on anti-Korean sentiment among Chinese consumers, which was triggered by the installation of the THAAD missile system in South Korea. But a bigger reason was that Chinese cars quickly raised their quality standard, weakening Hyundai Motor cars’ price competitiveness. In the luxury car market, it also failed to solidify its position due to a lack of attractive models.

Opening an exhibition hall in the center of Beijing is part of its strategy to raise its brand value. It is a pure exhibition hall, not a dealership. It is also a showroom for Hyundai Motor, not for Beijing Hyundai, a joint venture between Hyundai Motor and Beijing Motors. The vehicles on display at the exhibition hall include the All New Palisade, the Nexo hydrogen vehicle, and the i30 N TCR Racing Car.

A Genesis-only showroom is scheduled to open in October or November near SKP Department Store in Beijing. From the second half of next year, Hyundai Motor will produce EVs in China to respond to the explosive growth of the EV market and establish itself as a luxury car brand powered by high technology.

In 2021, sales of new energy vehicles (NEVs), including EVs, in China increased 150 percent from the previous year to 3,521,000 units, according to the China Association of Automobile Manufacturers (CAAM). At the end of May this year, the penetration rate of EVs reached 18 percent, a significant increase from 5.9 percent in 2020. The rate dwarfs that of Europe (16 percent) and that of North America (6 percent).

Beijing Hyundai will produce the EVs. Yet details of the plan have yet to be fixed. The decision is up to joint venture Beijing Hyundai.
 

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