Hyundai Motor seeks major rebound in China

Beijing Hyundai's Elexio electric SUV specially designed for China / Courtesy of Hyundai Motor

Hyundai Motor is rapidly reducing its losses in China, fueling hopes for its rebound with the upcoming launch of the Elexio electric vehicle (EV) exclusively designed for the world’s second-largest economy.

According to a business report from the Korean carmaker, Beijing Hyundai — a joint venture between Hyundai Motor and China’s BAIC — is seeing a sharp turnaround. It reported a loss of 994.1 billion won ($714 million) in 2023, but the figure dropped significantly to 42.3 billion in the first quarter of this year.

This was driven by Beijing Hyundai’s move to reduce unprofitable operating costs by selling its assets, such as factories. The company used to operate five factories in China, but it has sold two over the past few years, including facilities in Beijing and Chongqing.

Beijing Hyundai is also shifting its strategy with a focus on exports. The number of exported vehicles from the company reached some 15,000 between January and March, marking a more than 2,300 percent increase compared to the same period last year.

Hyundai Motor Group enjoyed its heyday in China with its sales reaching 1.6 million vehicles in 2016. The company accounted for a market share of 6.1 percent that year.

The company, however, has since faced challenges in its China business due to political risks and aggressive pricing strategies from emerging local carmakers, causing its market share to fall to about 1 percent last year.

Despite these challenges, Beijing Hyundai seeks a major rebound in the latter half of this year when it will launch the strategic compact electric SUV.

Kia, an affiliate of Hyundai Motor Group, also achieved a long-awaited rebound in China last year for the first time in eight years. The carmaker also recorded a surplus of 52.2 billion won there in the first quarter.

Industry officials argued that China is regaining the spotlight as a major auto market not only for its economic power, but also for the country’s tech prowess in eco-friendly cars.

“Chinese firms are achieving technological progress very rapidly in EVs and parts for eco-friendly cars, as evidenced by the strong success of China’s EV maker, BYD,” an official from the industry said.

“Korean carmakers making inroads into China is good not just for their earnings, but for future ties with Chinese partners.”