[Photo provided by Hyundai Motor Group]
Hyundai Motor Co. and Kia Corp.’s sales in China jumped 30 percent in the first quarter from a year ago with new releases of strategic models and reduced inventories at their dealer shops, but whether their high-end rebranding can beat established foreign luxury brands and local EV players remains uncertain.
According to the Korean auto conglomerate on Thursday, Beijing Hyundai Motor and Dongfeng Yueda Kia sold a combined 122,748 units from January to March, up 28.5 percent from the previous year thanks to the fast recovery of demand in the Chinese auto market.
Hyundai Elantra (Avante) sold 33,889 units, China-exclusive Hyundai ix35 22,074 units, Kia Sportage 8,487 units, and strategic compact SUV Kia KX3 5,668 units.
Hyundai Motor Group’s car sales have been waning since the state-led boycott in 2017 amid the diplomatic row between Seoul and Beijing due to Korea’s installation of an U.S. anti-missile shield on its soil. Its annual sales that stayed near-1.8 million units plunged to below 1 million units in 2019 and then the worst-ever 660,000 units amid the virus pandemic last year.
This year, the group targets to sell 817,000 units in China.
Hyundai Motor Group has been going all out to restore its reputation and improve profitability. It has reorganized local dealerships since the second half of last year and in result, the inventory of dealerships declined by 28,000 units as of the first quarter of this year. Through the inventory control, Hyundai Motor Group aims to avoid low-price setting and sales incentives.
Beijing Hyundai Motor also recently released strategic models of second-gen Mingtu (known as Mistra) sedan and Tucson L SUV and is planning to launch new multi-purpose vehicle. Dongfeng Yueda Kia promoted Ryu Chang-seung, general manager to CEO to focus on the new brand operation.
The Korean auto giant is also seeking to localize research and development, expand the electric vehicle lineup and speed up hydrogen fuel cell business. In the second half of the year, popular Hyundai Nexo Fuel Cell will be launched, possibly with Hyundai Ioniq 5, Kia EV6 and Genesis G80.
Still, it looks tough for Hyundai and Kia to recover its reputation. Amid aggressive promotional events by industry peers this year, Hyundai Motor Group’s market share this year fell 0.8 percentage point further to paltry 2.6 percent from a year earlier.
“Chinese premium vehicle market is already dominated by German top three brands and Japan’s Lexus. The EV market also is a playground of local peers under a big government subsidy program,” said Lee Hang-gu, an analyst at the Korea Automotive Technology Institute.
By Park Yun-gu and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]