Author: Tronserve admin
Friday 30th July 2021 03:39 AM
Hyundai Motor Group Faces its Worst Sales in 10 Years in China This Year
Hyundai Motor Group stayed defeated by local competition in China this year, doing worse than in 2017 when Korean brands were hit hard by state-led boycott, and is realigning its strategy with eco-friendly fleet to survive in the world’s largest car market.
Beijing Hyundai Motor, its joint-venture manufacturing unit in China, delivered an operating loss of 125.3 billion won in the July-September period, extending losses for the second consecutive quarter. Sales added 29.9 percent on quarter to 2.76 billion won.
Its cumulative losses from January to September this year stretched to 495.7 billion won, more than tripling from 159.4 billion won in 2017 amid the diplomatic row with China due to Seoul’s installation of an U.S. anti-missiles shield. The loss in the 50-50 joint venture translated into a 250 billion won deficit for the Korean parent.
Beijing Hyundai Motor early this year closed down one of its Beijing lines, the first factory it built in China capable of producing 300,000 vehicles per year, due to sagging sales. It has released new models to woo local consumers and made drastic leadership changes in hopes to bolster sales but is yet to make a comeback.
The Chinese venture shipped out 56,153 units last month, down 16.7 percent on year to account for a pitiful 3.0 percent share in the Chinese market, or 12th rank. Beijing Hyundai’s full-year sales are expected to stop at 681,000 units this year, a 10-year low.
Another joint-venture with Sichuan Nanjun Automobile Group that sells commercial vehicles no longer has any capital left due to losses from protracted sales plunge. Hyundai Motor’s rescue in 154.6 billion won did not last long. Hyundai Motor has to write down 19.9 billion won additionally from the loss in the joint-venture entity.
Kia Motors’ joint-venture Dongfeng Yueda Kia Motor also swung back to a loss of 20.6 billion won in the third quarter on revenue of 835.3 billion won. It reported an operating loss of 53.1 billion won in the first three months and returned to a profit of 15.8 billion won three months later.
Its cumulative operating loss amounted to 57.9 billion won from January to September, with sales of 2.08 trillion won, or 60 percent of those earned last year.
Beijing Hyundai and Dongfeng Yueda Kia Motor posted an operating profit of above 1.5 trillion won in 2016. Both of their profits retreated, and they reported a combined loss of 432.5 billion won in 2017. Their cumulative operating loss up to September this year totaled 553.5 billion won.
Hyundai Motor Group has redesigned its strategy and plans to focus on eco-friendly models from next year. It is readying car-sharing services to offer driving experience with new online sales platform and digital marketing plans. It will add an EV version of popular models such as mid-size sedan Hyundai Lafesta in the market.