Hyundai Motor Group's Sales in China Fall Below 700,000 Units for the First Time in 12 Years Last Year

Hyundai Motor Group's Sales in China Down 27% Last Year
Falls Below 700,000 Units for First Time in 12 Years Since 2008
Continuous Decline Since THAAD Incident
Betting on Hydrogen Vehicle Promotion and Premium Strategy for Rebound

[Asia Economy Reporter Suyeon Woo] Hyundai Motor Group's sales volume in China last year fell below 700,000 units for the first time in 12 years. Struggling in the Chinese market since the deployment of the Terminal High Altitude Area Defense (THAAD) system, Hyundai Motor Group has been unable to escape the slump, compounded by the adverse effects of the COVID-19 pandemic.

According to Hyundai Motor Group on the 18th, Hyundai Motor and Kia sold 664,744 units (wholesale basis) in China last year, a 27% decrease compared to the previous year. Beijing Hyundai, a joint venture of Hyundai Motor, sold 401,177 units, down 32%, while Dongfeng Yueda Kia sold 224,567 units, down 13.2%.

This is the first time in 12 years since 2008 (436,514 units) that Hyundai Motor and Kia's sales in China have fallen below 700,000 units. Even during the global financial crisis in 2009, which affected the worldwide automobile market, Hyundai Motor Group achieved growth in China that was double the previous year. After rapid quantitative growth, the group reached a record high of 1.79 million units in 2016, but has been on a downward trend since the THAAD conflict in 2017.

Hyundai Motor and Kia's market share in China rose to 10% in 2012 but was halved to the 5% range after 2017. Last year (3.8%), it dropped to the 3% range, marking eight consecutive years of decline.

Hyundai Motor Company and Kia China Sales Trends (Unit: 10,000 units) / Source: Hyundai Motor Group

Hyundai Motor Group aims to overcome the 'sore spot' of the Chinese market slump through expanding hydrogen fuel cell vehicle adoption and a premiumization strategy. First, Hyundai Motor is establishing an overseas production base in Guangzhou, Guangdong Province, capable of producing 6.5 million hydrogen fuel cell systems annually, which will begin full-scale operation next year. The strategy is to actively enter the Chinese hydrogen fuel cell vehicle market, which is expected to grow rapidly under government-led initiatives, through local production.

The premium car brand Genesis will also enter the Chinese market this year. Genesis received favorable reviews from Chinese consumers by unveiling global strategic models such as the G80, G90, and GV80 at the China International Import Expo held in Shanghai last November.

A Hyundai Motor Group official said, "We will enhance our brand image through advanced technologies such as electrification, hydrogen fuel cells, and autonomous driving, and launch the Genesis brand in the most important premium automobile market worldwide, China, this year to meet the diverse needs of consumers."