In the US, 'Ssing Ssing' but in China 'Stop First'... Hyundai Kia's Mixed Results in February

17.9% YoY Increase in the US... Successful SUV Strengthening Strategy
China Wholesale Down 97%... 'COVID-19' Major Adverse Factor

[Asia Economy Reporter Kim Ji-hee] Hyundai Kia Motors received completely contrasting results last month in the world's first and second largest automobile markets. While the United States, where efforts to strengthen the sports utility vehicle (SUV) lineup have been underway since last year, achieved record-breaking performance, China collapsed under the direct impact of the novel coronavirus disease (COVID-19).

According to Hyundai Motor America (HMA) on the 4th, Hyundai sold 54,600 units in the U.S. last February, including the Genesis brand, marking a 15.8% increase compared to the same period last year. During this period, Kia sold 52,177 units, an increase of over 20% from the previous year. This is the highest February sales volume ever recorded by Hyundai Kia Motors in the U.S. In terms of year-over-year growth rate, it achieved the third highest at 17.9%, following Mazda and Volvo.

The 'SUV strengthening strategy' that began in earnest last year has boosted U.S. performance. Among Hyundai's top five best-selling models, four SUVs?Tucson (2nd place, 9,594 units), Santa Fe (3rd place, 7,152 units), Kona (4th place, 7,092 units), and Palisade (5th place, 6,967 units)?were listed. Kia also placed Sportage, Sorento, and Telluride in the 'top 5,' each selling over 6,000 units.

Kia Telluride (Photo by Kia)

Since February last year, Hyundai Kia Motors has introduced four completely new SUVs to the U.S. market: the 'twin' large SUVs Palisade and Telluride, and the compact SUVs Venue and Seltos. These models alone sold nearly 18,000 units last month. This figure is similar to the increase in total Hyundai Kia Motors sales last month compared to February of the previous year. Bill Pepper, Vice President of Kia Motors America (KMA), said, "Kia has increased production of the Telluride, and sales of the Seltos, launched in January, are exceeding our initial expectations."

Unlike the beaming U.S. market, the Chinese market experienced the worst slump. Both Hyundai and Kia saw wholesale sales drop by 97%. Hyundai Kia Motors' ambitious China market strategy was blocked by the major adverse factor of COVID-19, rendering it ineffective.

Last month, Hyundai Kia Motors sold only 1,300 units in the Chinese market. This is less than 3% of the sales recorded in February last year, which approached 60,000 units. However, retail sales showed a smaller decline than wholesale sales. Retail sales last month were approximately 5,000 units for Hyundai and 1,800 units for Kia, representing about a 90% decrease.

Song Seon-jae, a researcher at Hana Financial Investment, explained, "The decline in Hyundai Kia Motors' sales in China was due to the extended holidays and almost no production caused by the spread of COVID-19. The larger decrease in wholesale sales was due to dealers' inventory burdens caused by the contraction in retail sales."

As a result, Hyundai Kia Motors' plan to strengthen profitability in the global market this year has inevitably required some revisions. Especially in the Chinese market, which has experienced sluggishness for several years, the plan was to improve profitability through optimized plant operations and efficient management this year, while expecting sales recovery from the second half of the year with the introduction of key new models.

An industry insider said, "In the North American region, Hyundai Kia Motors' sales strategy centered on large SUVs is working effectively, so future sales performance is expected to rise." However, "In China, external variables have a significant impact, and it seems there is little room to recover through Hyundai Kia Motors' strategy."

This content was produced with the assistance of AI translation services.