South Korean media: Hyundai Motor loses 70 billion won in China, Kia successfully turns losses into profits!

On April 5, South Korean media "The Korea Herald" published an article stating that Kia has successfully turned losses into profits in China after eight years. This contrasts sharply with Hyundai Motor, which has seen continuous losses in its Chinese business for six years. The preemptive strategy of transforming Chinese factories into export bases stands out.

The comprehensive total revenue of Beijing Hyundai, Hyundai's joint venture in China, was negative 717.7 billion won (approximately 3.57 billion RMB) last year. Although this improved by approximately 300 billion won compared to the previous year's loss of 1 trillion won, it has still incurred massive losses for six consecutive years.

In contrast, the comprehensive net profit of Jiangsu Yueda Kia, Kia's joint venture in China, was 4.58 billion won (approximately 228 million RMB) last year. This broke the losing streak that had persisted since 2017, spanning seven years.

Hyundai and Kia face similar situations in the domestic demand market in China. Due to poor sales over the past decade, their product lines have been significantly reduced, almost disappearing. In 2024, Hyundai and Kia sold 125,000 and 78,000 vehicles respectively in China, representing a 3% increase year-over-year. This is only one-sixth of what they sold in 2016. From a market share perspective, Hyundai holds 0.6%, while Kia holds 0.3%. Combined, the two companies' market share fell below 1%.

The differing performance of Hyundai and Kia in China can be attributed to exports. According to Kia's data, the company exported 140,000 vehicles from its Chinese factory last year. This is more than three times the volume of Hyundai's 45,000 vehicles. By the third quarter of last year, Kia's Chinese factory utilization rate also exceeded 96%.

Kia began using its Chinese factory as an export base starting in 2021, two years earlier than Hyundai. Leveraging the geographical advantage of its Yancheng factory located in eastern China, it primarily targets the Middle East (43%) and Central and South America (30%) markets. Although the sales volume is still small, its strategic electric vehicle, the EV5, has also begun exporting. The plan for this year is to increase the export volume of Chinese factories to 250,000 units.

Hyundai also demonstrated determination to revive its business in China. In December last year, it announced an investment of approximately 1.6 trillion won in Beijing Hyundai, with each party contributing half. In fact, Hyundai paid 400 billion won to Beijing Hyundai in January this year. Not only does the company focus on pure electric vehicles, but it also announced at the CEO Investor Day last August the development of a new plug-in hybrid electric vehicle that is highly anticipated in China, with local production starting next year.

Original source: https://www.toutiao.com/article/1828563259307012/

Disclaimer: The article represents the views of the author alone.