The Revival of the Midsize Sedan: The Power of Sonata

Over 171,344 Units Sold Last Year, Sonata Accounts for More Than Half... Strong Performance Amid SUV Trend

Hyundai Sonata (Photo by Hyundai)

[Asia Economy Reporter Kim Ji-hee] As the domestic automobile market is being reorganized around sport utility vehicles (SUVs), sales of mid-size sedans have rebounded for the first time in three years. The new Sonata, launched in March last year, led the revival of the mid-size sedan market with strong performance.

According to the Korea Automobile Manufacturers Association on the 24th, a total of 171,344 mid-size sedans (Hyundai Sonata, Kia K5, GM Korea Malibu, Renault Samsung SM5, SM6) were sold last year. The mid-size sedan market, which had recorded around 200,000 units annually, peaked at 227,351 units in 2016, then showed a declining trend every year before rebounding last year after three years. In 2017, sales were 200,850 units, and in 2018, 165,692 units.

The Sonata accounted for more than half of the total mid-size sedan sales. The new Sonata recorded 65,242 units, and the previous LF Sonata also sold 34,761 units, mainly LPG models. Hyundai announced its ambition to lead the revival of sedans, which had shrunk in an SUV-dominated market, by launching the 8th generation Sonata in March last year.

The strong performance of the new Sonata is even more meaningful considering it was achieved without offering a taxi model. Hyundai gave up the taxi trim, which accounted for about 35% of total sales, aiming to establish the new Sonata as a premium sedan. Last year, GM Korea’s Chevrolet Malibu struggled without benefiting from a new car effect, and Renault Samsung’s SM5 was discontinued, adding many negative factors to the mid-size sedan market, which made the Sonata’s burden even heavier.

Sonata Sensuous (Photo by Hyundai Motor Company)

The new Sonata is analyzed to have captured the hearts of younger generations with its youthful design and various advanced technologies. Compared to the previous model, the height was lowered by 30 mm, and the wheelbase and overall length were extended by 35 mm and 45 mm respectively, creating a coupe style favored by younger consumers. Its positioning as a "smart mobility device" equipped with various cutting-edge technologies is also cited as a key to its success. It was the first to apply smartphone-based personalized profiles, digital keys, and built-in cameras, and convenience features such as remote smart parking assist and a 12.3-inch cluster were also enhanced.

As the new car effect of the new Sonata diminishes this year, the K5 is expected to support the mid-size sedan market. Since the launch of the completely redesigned K5 in December last year, it has been on a roll, setting monthly sales records for the first time in over four years. In January, K5 sales increased by 144% year-on-year to 8,048 units. This is the highest monthly sales figure in 49 months since December 2015 (8,079 units).

Supply rather than demand is the key issue. As of last month, the backlog of K5 orders is known to have reached 15,000 units. Even at frontline dealerships, customers are being informed that they must wait more than two months for delivery after signing a contract. Recently, concerns about supply shortages have grown due to the inability to operate domestic factories normally amid the impact of the novel coronavirus disease (COVID-19).

An industry insider said, "The mid-size sedan market has long been closely linked to the launch and success or failure of the Sonata, but recently this trend has become even stronger," adding, "The fact that the entire market is greatly influenced by a single model also means that market demand is unstable."