Hyundai, Kia offer deep discounts in China

By Lee Hyo-sik

Hyundai Motor and Kia Motors have begun offering deep discounts on sports utility vehicles (SUVs) and other cars by as much as 40 percent in order to prop up their sagging sales in China.

The discount campaign is also designed to exhaust inventories of older models ahead of the launch of new ones in the world’s second-largest automobile market.

The two automakers have seen their sales plunge this year amid intensifying competition from China’s homegrown brands. Volkswagen and other global carmakers have slashed prices of their popular vehicles, stealing customers from Hyundai and Kia.

According to Hyundai Motor Group Monday, it has lowered prices of Hyundai’s Tucson SUV and other models, which will soon be replaced by new ones.

Chinese dealers selling the Tucson ix35 reportedly offer as much as a 40 percent discount, or 15 million won ($13,000), ahead of the release of the All New Tucson in early September. The dealers are also providing buyers with additional gifts, worth 1.45 million, to dispose of their inventories.

Dealers for Kia Motors have also lowered the prices of the Sportage SUV by about 9.4 million won to attract price-sensitive motorists.

It is the first time for Hyundai and Kia to cut their vehicle prices in China by double-digits, according to company officials.

“The ongoing discount campaign in China is to dispose of discontinued models ahead of the launch of new models,” a Hyundai Motor official said.

Hyundai is set to launch the All New Tucson on Sept. 5 in China, while Kia plans to introduce the New K5 mid-size sedan and the All New Sportage in the second half of the year.

The two automakers decided to slash sales prices in China because they struggle to keep up with Chinese and multinational automakers that place top priority on increasing their market shares.

In the first seven months of 2015, Hyundai sales reached 564,389 in China, down 10.9 percent from the same period last year. Kia sold 6.3 percent fewer cars from January to July.

In the domestic market, the two car makers have been suffering from a steady decline in sales in the first half of the year in the wake of the outbreak of the Middle East Respiratory Syndrome (MERS) which hit almost all industrial sectors of the nation.

Industry watchers have guarded optimism about a possible economic recovery given the slight rise in industrial production for a second straight month in August.