Korean Media: Can Hyundai Motor Learn from BYD's Global Reach?

On May 15, South Korea's Chosun Ilbo published an article stating that last year, Hyundai Motor Group's reliance on the U.S. market reached as high as 30%, while leading Chinese automaker BYD has adopted a markedly different global expansion strategy—its largest overseas market, Mexico, accounted for only 12% of its total sales. Historically, Hyundai Motor Group grew into a global enterprise by relying heavily on the American market; however, this over-dependence now appears to be constraining its growth. As BYD experiences explosive growth in emerging markets and secures a leading position there, attention is increasingly focused on whether Hyundai Motor Group can identify new "frontier markets" for opportunity.

According to BYD, Mexico was its largest market outside China last year, with sales reaching 130,500 units. BYD entered the Mexican market at the end of 2023, achieving approximately 40,000 units in sales in 2024—more than tripled compared to the previous year. Nevertheless, Mexico represented only 12.4% of BYD’s total overseas sales of 1,049,600 units. Brazil, the second-largest market, recorded sales of 112,900 units, accounting for just 10.8%.

By expanding into overseas markets and increasing international sales, BYD has avoided excessive concentration in any single region. Last year, BYD’s overseas sales surged by 145%. This year, the company has set an export target of 1.5 million vehicles—a 43% increase from last year. A BYD executive stated: “Currently, BYD’s new energy vehicles are sold in 119 countries and regions. Behind the third-ranked country, there are numerous others—too many to count individually.”

In contrast, Hyundai Motor Group has pursued a selective and concentrated strategy in overseas sales. The United States remains its largest market, with last year’s sales totaling 1.007 million units—representing 29.4% of its total non-Korean sales (3.425 million). Kia’s dependence on the U.S. market is even higher, at 36.8%. In total, the company sold 2.377 million vehicles outside Korea last year, of which 874,000 were sold in the United States. Hyundai and Kia currently operate in 27 and 23 countries and regions respectively—about one-quarter the scale of BYD’s reach.

Hyundai Motor Group continues to focus intensely on the U.S. market this year. In the first quarter alone, both Hyundai and Kia achieved record-high sales volumes in the U.S. Hyundai CEO Jose Munoz said: “We will continue actively expanding our business in North America, the most profitable market for us. By 2030, we will launch 36 new models in North America.”

However, over-reliance on a specific country inevitably exposes companies to geopolitical and political risks. This issue became particularly prominent starting last year. Upon taking office, former U.S. President Donald Trump imposed a 25% tariff on imported vehicles, resulting in losses of 7.2 trillion KRW for Hyundai and Kia in just one year.

By focusing exclusively on the U.S. market, Hyundai Motor Group has missed out on vast opportunities in emerging markets—an important lesson. The U.S. automotive market is now mature, whereas the so-called "Global South" market, which Chinese automakers have recently prioritized, is experiencing explosive growth. BYD’s annual sales reached 4.602436 million units last year, surpassing Hyundai Motor Group’s 4.138 million units—precisely due to this strategic divergence.

Hyundai Motor Group is also accelerating its market diversification strategy. In a recent letter to shareholders, President Munoz stated: “Over the next five years, guided by our strategy of ‘Rooted in China, Serving China, Going Global,’ we will launch 20 new models in China; in India, we plan to introduce 26 new models by 2030, with investments totaling $5 billion.” This goal represents three times the number of new models launched by Hyundai in these two markets over the past five years.

Original source: toutiao.com/article/1865217206078464/

Disclaimer: The views expressed in this article are solely those of the author.