By Choi Sung-jin
Sister automakers Hyundai Motor and Kia Motors aim to export 8 million cars this year, as they did in the past two years.
Their overseas shipment target seems reasonable given their brisk exports to the U.S. and European markets so far this year. But when it comes to shipments to China, the world’s largest car market, the story is different.
According to industry sources, the two companies sold 94,235 cars in China in February, a drop of 21.2 percent from the 119,512 sold in the same month last year.
Hyundai Motor’s sales plunged 28.1 percent to 53,226 cars and those of Kia dropped 9.9 percent to 41,009 cars. In January, too, the two automakers’ combined sales in China plummeted 21.9 percent from a year ago to 124,495 cars. Industry sources presume the “China shock” for Korea’s largest auto group might have continued in March.
“Given the increasing share the Chinese market takes in Hyundai-Kia’s overall sales, the slump in the first quarter of this year will likely pose a considerable burden on their global performances this year,” an industry analyst said.
More seriously, the sales setback came while total auto sales in China in February rose 2.3 percent from a year earlier to 1.23 million vehicles, he said. Over the period, the sales of Ford, Toyota and Honda increased by 5.3 percent, 11.4 percent and 45.2 percent, respectively. Particularly, the sales of Chinese cars amounted to 418,317 units, up 12.4 percent from the same month last year.
In February, Volkswagen took the largest market share in China of 19.9 percent, followed by GM’s 13.2 percent, Hyundai-Kia’s 7.7 percent, Ford’s 5.2 percent, Toyota’s 4.5 percent, Honda’s 4.4 percent, Nissan’s 2.9 percent and Peugeot-Citroen’s 2.8 percent. Hyundai-Kia’s Chinese market share fell sharply from 10.6 percent in December.
Some industry executives, in and outside the company, expressed concern that the “China shock” that hit the automaker in the third quarter last year may revisit it. In July-September last year, Hyundai-Kia fell into a crisis, sandwiched between low-priced Chinese vehicles and higher-quality Western cars. The automotive group barely managed to get out of the crisis by replacing local management and embarking on a massive marketing campaign.
This time, their Seoul headquarters plan to hit back by releasing new local models equipped with an air-purifying system that blocks polluted material and a “connectivity platform” run by China’s largest platform, Baidu, that connects vehicles to smartphones, a company spokesman said.
“With these and other active marketing activities, we hope to restore sales in the first half to that of a year ago,” he said.