Hyundai, Kia plan to speed up China marketing

By Park Jin-hai

Hyundai Motor and Kia Motors say that they will beef up their sales network in China to strengthen their presence in the world’s fastest-growing market.

Hyundai will increase the number of its dealers to 1,000 from the current 920 within this year, while its sister firm Kia will also up its dealers to 885 from the current 785, according to the companies.

Industry sources say that it is a preemptive step to secure sales networks ahead of their fourth China plant in Changzhou and fifth plant in Chongqing on which the companies will start construction within this year.

“The dealership will grow in the midwestern part of China. So far we have focused on big cities like Beijing and Shanghai, but see their growth has reached its limit. Thus, smaller midwestern cities of Chongqing and Xuchang will also see our dealerships grow within this year,” said a Hyundai official.

When Hyundai increase its dealerships to 1,000, it will become the second foreign automaker to have more than 1,000 shops in China following Shanghai GM, which currently runs 1,269 dealerships there.

The dealership expansion, however, comes when Hyundai Motor and Kia Motors saw their market shares in China inch down recently. The third-largest market player after Volkswagen and GM has been experiencing a fall in market share due to the shortage of supply where their plants are running at full capacity.

In February, Hyundai sold 74,002 vehicles in China, while Kia sold 45,510. Their market shares in China are estimated at 6.2 percent and 3.8 percent, respectively, down 0.5 percentage point and 0.1 percentage point from a year earlier.

“When those plants are finally constructed, they will be able to secure enough supply. Until then, we need to expand the dealer network,” added the official.

Recently, Hyundai unveiled its new version of the Sonata sedan, a special model for the Chinese market, manufactured and marketed exclusively to meet its culture-specific needs.

The automaker aims to sell 120,000 LF Sonata vehicles a year.

"The target customers for the new Sonata in the Chinese market are mainly businesspeople in their mid-to-late 30s, and our aim is to sell an annual 120,000 cars with aggressive marketing strategies," said Choi Sung-kee, head of Hyundai Motor's China marketing division, during its launch event.

Its all-new Tucson SUV also awaits its China debut. Previously, Kia Motors launched the KX3 compact SUV designed for Chinese consumers.

The company has also been working on the interior of the dealerships there, so that each can present a unified Hyundai image.

Beijing Hyundai has been setting the global standard for dealerships since last year and trying to renovate dealer shops. It plans to remodel 70 percent of its older shops by 2020, lifting the carmaker’s image in China.