'Out of Stock' Hyundai Motor·Kia... 'Even If Available, Not Selling' Renault·SsangYong·Chevrolet

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Hyundai Motor, Kia, Renault Samsung Motors, SsangYong Motor, and Korea GM?collectively known as Reu·Ssang·Shwe?are facing polar opposite situations. Hyundai Motor and Kia are experiencing a "can't sell enough" situation due to a shortage of automotive semiconductors, while Reu·Ssang·Shwe are running various promotions but are in a situation where "even if they have cars, they are not selling."

According to the completed vehicle industry on the 16th, Hyundai Motor will halt production on some lines at its Ulsan plant due to semiconductor supply shortages affecting components such as the Airbag Control Unit (ACU). The lines stopping operations include Ulsan Plant 5 Line 52 (from the 17th to 18th of this month), which produces the compact SUV Tucson and hydrogen electric vehicle Nexo, and Ulsan Plant 3 (on the 18th of this month), which produces the compact sedan Avante and small SUV Venue. Kia has also decided to suspend operations at its Soha Plant 2 on the 17th and 18th for the same reason. Soha Plant 2 produces small SUVs such as the Stonic.

Previously, Hyundai Motor had halted operations at Ulsan Plant 1 and Asan Plant last month, and also stopped and then resumed operations at Ulsan Plant 4, which produces the Porter, on the 6th and 7th of this month. Kia has also suspended most weekend overtime work.

As a result, the delivery schedules for Hyundai Motor and Kia are becoming increasingly uncertain. For the Tucson, which has the most severe backlog, delivery dates have yet to be confirmed, and the popular 1-ton truck Porter is taking more than five months. For Kia, models such as the Sorento and K8 also require over four months for certain trims.

Nevertheless, Hyundai Motor and Kia have been chosen by customers, selling 345,777 units (72,910 units domestically) and 249,734 units (51,128 units domestically), representing increases of 106.2% and 78%, respectively.

However, Reu·Ssang·Shwe only sold 14,254 units last month. Korea GM, Renault Samsung, and SsangYong sold 5,470, 5,466, and 3,318 units respectively, representing decreases of 25.4%, 28.6%, and 35.7% compared to April last year.

[Image source=Yonhap News]

The poor performance of Reu·Ssang·Shwe is analyzed not to be simply due to the impact of COVID-19 or the semiconductor shortage. These foreign-affiliated companies have been running aggressive promotions since early this year, offering discounts of hundreds of thousands of won, interest-free installments, and partial insurance support, but consumers are still ignoring them. Moreover, Hyundai Motor and Kia, which are also experiencing COVID-19 and semiconductor shortages, have actually increased their sales.

The industry's view is that Reu·Ssang·Shwe's poor performance is due to a lack of lineup in domestically produced models and aging existing models, which have lost customer interest. Hyundai Motor and Kia continuously launch new models and upgrade existing ones to meet customer demands. However, foreign-affiliated companies have not received new car production allocations from their headquarters and are overly dependent on a few key vehicles.

In particular, Renault Samsung and Korea GM face concerns that their headquarters might consider withdrawing from the market due to high wages, low efficiency, and labor-management conflicts. Additionally, SsangYong is undergoing corporate rehabilitation procedures, and frequent refusals of deliveries by suppliers are cited as factors causing customers to hesitate in purchasing vehicles.

Imported cars are also being chosen as alternatives by domestic customers, with Mercedes-Benz and BMW selling 8,430 and 6,113 units respectively last month, surpassing Reu·Ssang·Shwe's sales volume.

An industry insider said, "The poor performance of Reu·Ssang·Shwe is due to multiple complex factors," adding, "There are many realities to overcome, such as new car allocations, lineup expansion, labor-management harmony, and production normalization."