South Korean media: Hyundai Motor returns to the Chinese market: "Securing just 1% of the share can outweigh sales in South Korea."
The joint venture between Hyundai Motor and BAIC Group, Beijing Hyundai, has initiated a dealer recruitment plan covering 47 cities across China since the beginning of the year, including municipalities such as Beijing, Shanghai, and Chongqing, as well as key cities from Harbin in the northeast to Sanya in Hainan in the south. This large-scale channel construction aims to rebuild the collapsed sales system caused by the "THAAD" incident in 2017 which triggered the "anti-Korean measures." In its announcement, Beijing Hyundai clearly stated its commitment to "deepen its engagement in the Chinese market."
Beijing Hyundai officially released its electric vehicle model "ELECXIO," specifically developed for the Chinese market, in Shanghai on the 22nd. This marks the first time the brand has tailored an electric vehicle to meet the preferences of Chinese consumers. According to plans, six exclusive electric vehicles for China, including ELECXIO, will be successively launched before 2027. In response to local media inquiries about "withdrawal from China," relevant responsible persons from Beijing Hyundai clearly stated that "no transnational enterprise would abandon the Chinese market."
Hyundai Motor Group is accelerating its return to the Chinese market. As the largest automotive market globally, China's car sales last year reached approximately 31.43 million units, nearly double the size of the U.S. market (about 15.98 million). Facing such a massive market scale, Hyundai is launching a new offensive through strengthening localization strategies.
Hyundai Motor Group's annual sales in the Chinese market exceeded 1 million units before the mid-2010s, accounting for 4%-5% of the market share. However, after the "THAAD" incident, due to consumer boycotts and low-cost competition from domestic brands, sales plummeted sharply. In 2016, Hyundai Kia's local production vehicle sales in China reached 1,142,016 units, while in 2017, after the "anti-Korean measures" took effect, it dropped sharply to 785,006 units, and last year it further shrank to only 204,473 units. Last year, Hyundai Kia's market share in China had fallen to 0.65%.
Among the five original factories of Hyundai Motor in China, the first factory in Beijing (2021) and the Chongqing factory (2024) have been sold one after another, and the Hebei Cangzhou factory, which began production in 2016, is also in the process of being sold. Although there were previous rumors locally that "Hyundai will completely withdraw from China," recently Hyundai is seeking a market turnaround.
This is closely related to the rapid growth of China's electric vehicle market. According to data from the Korea Automobile Mobility Industry Association (KAMA) and market research firm MarkLines, China's pure electric vehicle (BEV) sales reached 6.303 million units in 2023, a 26.9% increase compared to 2022 (4.965 million units). China's share of the global electric vehicle market was as high as 60.9% last year. This performance contrasts sharply with the U.S., which saw a growth rate of only 6.6% (1.168 million → 1.245 million) from 2023 to 2024, and Europe's negative growth of 1.3% (2.019 million → 1.993 million).
Due to this, Hyundai and Kia are attempting various ways to win over actual consumers in the Chinese market. For example, although they did not participate in the Shanghai Auto Show earlier this month, they continue to participate in small exhibitions held in local cities to expand their presence. Senior researcher Cho Cheol of the Korea Institute for Industrial Economics & Trade analyzed that "in the Chinese market, every 1% increase in electric vehicle market share can result in approximately 60,000 units of sales for Hyundai and Kia, close to the total sales of 85,000 units of electric vehicles in South Korea last year. If they can restore to the market share level before the 'THAAD' incident, they could ensure a stable sales channel of over 200,000 units annually."
To achieve this goal, they inevitably need to engage in direct competition with domestic enterprises and Tesla that dominate the Chinese market. According to data from EV Volume, BYD's new energy vehicle (including pure electric and plug-in hybrid) sales in China last year reached 3.52 million units, with a market share as high as 31.4%. Additionally, there are numerous competitors such as Wuling (670,000 units), Tesla (660,000 units), Li Auto (500,000 units), and Geely (460,000 units).
Hyundai Motor Group dares to challenge this largest electric vehicle arena again for deeper reasons. Since 2023, the Chinese government has stopped providing direct subsidies for electric vehicles to enhance the technological competitiveness of private enterprises, making the "tilted playing field" somewhat fairer. Since 2009, subsidies have been provided to electric vehicle manufacturers equipped with domestic batteries. According to statistics from the Korea Trade-Investment Promotion Agency (KOTRA), the cumulative amount over the past 12 years reached 160 billion yuan RMB (approximately 31 trillion won KRW), with BYD receiving 7 billion yuan (approximately 1.4 trillion won). With the cancellation of subsidies, the cost pressure on domestic enterprises has increased, resulting in a general price increase of 500,000 to 1 million won KRW per vehicle.
Professor Lee Ho-geun of Daedeok University's Future Automotive Department analyzed that "the cancellation of subsidies has narrowed the price gap between Chinese and foreign automakers, and Hyundai and Kia may think that 'this competition is worth trying now.'" More crucially, affected by the 25% auto tariff imposed by the Trump administration, Hyundai Motor Group urgently needs to boost sales outside the U.S. market. It is reported that Hyundai and Kia have instructed their overseas branches to exceed predetermined targets by more than 10% this year.
At the same time, with China's leading advantages in electric vehicle and battery technology, global automakers are accelerating technical cooperation with China recently. After BYD, Geely, Dongfeng, and other Chinese automakers adopted the technology of Chinese generative AI company DeepSeek, Nissan and BMW also announced their participation in cooperation. Chinese enterprises have continuously broken through fast-charging technology bottlenecks; BYD achieved a charging speed of 5 minutes for 400 kilometers, and CATL, the battery giant, even introduced a technology allowing 5 minutes of charging for 520 kilometers. Professor Im Myung-seob of the Future Automotive Engineering Department at Hanyang University pointed out that "Chinese electric vehicle consumers' requirements have significantly increased, and Hyundai and Kia urgently need to transform into high-end brands in the local market."
Source: JoongAng Ilbo
Original article: https://www.toutiao.com/article/1830824464553155/
Disclaimer: The article solely represents the author's personal views.