Hyundai Motor's Steadfast Strategy to Get Full Price for RVs Overseas Paid Off

Hyundai Motor's Average RV Sales Price Surpasses 50 Million Won for the First Time in Q3
Expansion of Palisade Sales in the US Proves Effective
Maintains 'Getting Full Price' Strategy Despite Unfavorable Exchange Rate Environment
Additional Increase Expected Considering GV80 US Launch at the End of This Month

[Asia Economy Reporter Suyeon Woo] Hyundai Motor Company's overseas average selling price (ASP) for recreational vehicles (RVs) in the third quarter of this year surpassed 50 million KRW for the first time ever. This signifies that Hyundai is being recognized for quality competitiveness rather than price competitiveness in advanced overseas markets, and considering the upcoming U.S. launch of the Genesis sport utility vehicle (SUV) GV80 at the end of this month, further ASP increases are expected.

According to Hyundai on the 26th, the overseas market RV ASP in the third quarter of this year was 51.15 million KRW, a 44% increase compared to the same period last year. Hyundai's overseas RV ASP had fallen to 33.93 million KRW in 2018 due to a lack of SUV lineup and model aging, but since last year, the SUV lineup has been reorganized, surpassing 40 million KRW in the first half of this year and exceeding 50 million KRW for the first time in the third quarter.

The overseas market RV ASP is a simple average price applying exchange rates to sales prices in representative advanced countries such as North America (U.S.), Europe (Germany), and Asia (Australia). Despite the unfavorable exchange rate environment caused by the strong Korean won in the third quarter, Hyundai's strong performance by emphasizing quality competitiveness in advanced overseas markets is meaningful.

This ASP increase was mainly driven by expanded sales of the large SUV Palisade in the U.S. Until last year, the Palisade sold about 4,000 units per month on average, but in the first half of this year, it rose to about 5,900 units per month, and in the third quarter, sales rapidly expanded to about 8,000 units per month.

Until the early to mid-2000s, Hyundai competed in overseas markets by pricing about 20% lower than Japanese cars, relying on price competitiveness. However, in the 2010s, aggressive yen depreciation policies by Japan made it difficult to maintain such price differences. From the third quarter of this year, despite the clear strengthening of the Korean won creating an unfavorable environment for export prices, Hyundai has maintained a 'getting the right price' policy in overseas markets by emphasizing locally tailored designs and advanced driver assistance systems (ADAS).

The starting price of the Palisade sold in the U.S. is $32,525, the second highest among SUVs in the same class after Toyota's Highlander ($34,810). Compared to competing models in the same class such as the Subaru Ascent ($32,295), Honda Pilot ($32,250), Ford Explorer ($32,225), and Volkswagen Atlas ($31,555), the Palisade's starting price is relatively high. Incentives per vehicle, which are usually increased to reduce inventory when vehicles do not sell, have been steadily decreasing.

Moreover, with the addition of the Genesis GV80, scheduled for U.S. release at the end of this month, Hyundai's overseas average selling price for RVs is expected to rise further. The local U.S. selling price of the GV80 starts at $48,900, and recent pre-orders in the U.S. have surpassed 20,000 units. Considering that the total annual sales of the Genesis brand in the U.S. last year were about 20,000 units, this indicates considerable popularity.

Moon Yong-kwon, a researcher at Shin Young Securities, said, "Starting next year, exports of relatively high-priced E-GMP-based electric vehicles along with the GV80, GV70, and G80 are expected to begin," adding, "Thanks to increased export volume and average price rises, Hyundai's export sales next year will break the all-time record."

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