Hyundai and KIA groups have lukewarm performances in China in recent years. Hyundai released Q1, 2016 financial report in April, showing that it has a net profit of Won 1,687b, decreasing 12%. It’s the ninth consecutive quarter of sales decrease. Report also analyses that the reason comes in bad sales volume in China market.
Hyundai KIA sells 1.11m units vehicles in the first quarter, decreasing 2%. The sales volume in the Chinese market fell to 100,000 units, decreasing 10%. Although it shows an overall recovery, Hyundai KIA faces a new task of increasing market share in the Chinese market.
In 2015, Hyundai KIA sells 1.68m units vehicles in China, which is Hyundai KIA’s biggest single market across the world and occupies 21% of global sales volume. Resulted by the decreasing sales volume in China, the 8.2m units target set in 2015 cannot be achieved.
The main reasons for decreasing Korean-brand vehicles come that Japanese brands are recovering their market shares and independent brands are occupying great market shares. The most important factor is that Korean brands are lacking their strengths in brands.
Hyundai KIA is adjusting their strategies in the Chinese market since August of last year. Auto analyst once said, Korean brands have a low image in the Chinese market, and the lacking of high-end brands is an important factor of limiting their future developments. In fact, KIA launched an independent luxury brand Genesis in November of last year, emphasizing that “the new Genesis brand will compete with first-class global luxury brands.” It also announces that Genesis will launch six new models in the future five years.
It’s expected that Hyundai will launch new brands in China soon. Maybe the adjustment towards its imported vehicle business in China is a prelude to its plan.
