Will Hyundai terminate Sonata series?

Sister Kia’s new sedan K-5 eating away its market share

By Kim Yoo-chul

Staff reporter

Will Hyundai-Kia Automotive Group kill its "steady best-seller," the Sonata?

Hyundai officials say "absolutely not," but there appear to be signs that such an eventuality may be on the cards.

The biggest threat to Hyundai's best-selling vehicle is not from outside but from its sister firm, Kia.

Orders for Kia's K-5 sedan, which will be marketed soon, are so overwhelming as to take away from orders for the YF Sonata, a handsome-looking sedan with what Hyundai calls the product of "fluidic design."

According to the data given by the group, Thursday, 11,138 Sonata were sold locally in April, a decrease of 23.6 percent from a month ago.

The local sales of all Hyundai cars fell by 14.4 percent last month from the previous month. The plunge in Sonata sales was rare.

"Hyundai has previously been enjoying buoyant sales of the model during the first quarter. But situation has changed," a high-ranking industry executive said.

Hyundai officials say that the drop in Sonata sales will be transient so there is no need to determine whether to put an end to the Sonata series.

"It is different from Volkswagen's Beetle, which took decades to see a follow-up model," a Hyundai official said. "Cars in the Sonata series are often totally different cars from each other."

Still, the numbers don't look good, although any termination of the Sonata series would prove to be a hard pill to swallow, considering its flagship position in the Hyundai lineup.

For the first three months of this year, the combined sales of the Sonata were 40,720 and the sales curve was impressive ― 14,575 for March, 12,217 in February and 13,928 in January.

It remains debatable over what the decisive factors for the sudden drop are. But analysts and watchers cite higher appetites for the K5 by consumers as one possible reason.

Officials at Kia Motors said it has so far sealed a total of 9,000 contracts, including 6,000 pre-orders from March 5, which they claim is "impressive."

"We are receiving more calls about the K5. It is yet to be seen whether the popularity of the model will continue for the remainder of this year," an official at Kia said.

The new model has a low, wide stance, while a long wheelbase. Short overhangs will serve to set it apart from its global segment competitors, Kia believes.

Developed under the TF codename, the K5 uses the same front-wheel drive Type-N platform as the recently launched Hyundai Sonata and Kia K7 sedans.

Launch engines consist of Hyundai-Kia’s existing 1.8 and 2.4-litre gasoline I4s, while the existing model’s 2.0-litre diesel will be replaced by the more modern 2.2-litre R-engine. A gasoline-electric hybrid powertrain is due to be added in Korea, Canada and the United States in 2011.

"It is forecast Kia will undertake aggressive promotions in terms of pricing. The demand for Sonatas will continue. Who knows if top Kia officials want cannibalization to fuel the ongoing momentum for its external growth," Song Chang-hoon, an analyst at Kyobo Securities, said, adding the local brokerage still maintains its "overweight" position for Kia Motors.

By whatever measure of increasing sales ― higher in general or eating into Sonata sales ― K5 could crimp the Sonata’s margins, according to watchers.

기아자동차가 현대차를 갉아먹고 있다?

지난달 현대차의 신형 YF쏘나타의 내수 판매는 3월보다 23.6% 급감했다.

같은 기간 현대차 전체 내수 판매 실적이 14.4% 떨어진 것과 비교하면 감소 폭은 배 가까이 된다.

쏘나타가 지난해 9월 출시 이후 현대차 내수 판매를 이끌어왔던 점을 감안하면 이 같은 판매 부진은 이례적인 것.

현대차 관계자는 ``그렇다고 해서 YF쏘나타가 시장에서 사라지지는 않을 것’’이라며 ``소비자들의 K5에 대한 관심이 높아지고 있는데 기인한 것’’이라고 말했다.

지난달 5일부터 사전 예약판매된 K5는 6,000여대였으며 본격 출시된 후 현재까지 총 9,000여대가 계약됐다. 쏘나타의 한달간 판매대수에 필적할 만한 수치다.

기아차 관계자는 ``K5 신규 주문이 지속적으로 늘고 있다’’며 ``이 같은 상승세가 꺾이지는 않을 것’’이라고 말했다.

K5는 출시 전부터 디자인과 편의사양들이 공개되면서 소비자들의 높은 관심을 받아왔다. 특히 K5의 주력인 2.0리터 가솔린 모델이 쏘나타 2.0과 같은 쎄타II MPi엔진을 장착해 동등한 주행성능을 갖지만 엔트리 가격은 쏘나타보다 오히려 20만원 저렴한 점이 돋보이고 있다.

그러나 일각에서는 이는 현대.기아차그룹의 `카니발리제이션(Cannibalization: 자기잠식) 마케팅 전략에 따른 일시적인 현상이라고 분석하고 있다.

쏘나타와 K5의 관계처럼 특정 기업의 새로운 제품이 기존 제품과 직접적으로 점유율 경쟁을 펼치는 마케팅 전략을 `카니발리제이션’이라고 부른다.

새 기술이나 제품 도입으로 인한 경쟁으로 수익이 줄어드는 것을 의미하기도 한다.

업계관계자들은 한 지붕 두 가족 브랜드인 기아차가 K5를 출시하면서 시장지배력을 높였고, 이는 그룹의 전체적인 경쟁력 제고에도 도움이 될 수 있을 것이라는 전망을 내 놓고 있다.

송창훈 교보증권 애널리스트는 ``YF쏘나타에 대한 수요가 감소하지는 않을 것’’이라며 ``기아차 경영진들이 카니발리제이션을 통한 양적 팽창을 원하고 있을 지 누가 알겠느냐’’고 말했다.