Hyundai, Kia Plot to Reclaim Market Share

Hyundai and affiliate Kia are trying to turn things around after sluggish sales at home and abroad this year. The automakers hope to reclaim a 70 percent slice of the domestic market by releasing new versions of its bestselling models while resorting to aggressive marketing strategies overseas.

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◆ New Models

Kia premiered the new Sportage in Hwaseong, Gyeonggi Province on Thursday. First launched in 1993, the SUV had sold over 3.5 million units by the first half of this year. The new model will hit showrooms overseas at the end of this year to compete against the Honda CR-V and Volkswagen Tiguan.

Hyundai is taking pre-orders for the new Avante compact sedan. Since its launch in 1990, the Avante has established itself as one of the automaker's flagship models and became the first single model to hit the 10 million mark in global sales last year.

"The first fully modified Avante to be launched in five years offers the best features in its class in terms of safety and conveniences", a Hyundai spokesman claimed.

Hyundai will also roll out a completely revamped version of the Equus premium sedan at the end of this year to claw back the domestic market.

Overseas, Hyundai will focus on emerging markets. For example, in India it launched the Creta SUV on July 21, specially designed to appeal to drivers there. Pre-orders reached over 10,000 units, and it sold 6,783 units over the past one month alone.

"Due to brisk performance of flagship models, sales there increased by 10.1 percent on-year for the first seven months of this year", said a spokesman for the automaker's Indian branch.

Hyundai saw its market share rise in Brazil, India, Mexico and Russia. China was the only exception.

The falling won market is also good news for the automaker. "If the exchange rate falls by 10 percent against the greenback, it translates into a seven-percent rise in net profit for Hyundai and 10 percent for Kia", said Kim Jin-woo, a researcher at Korea Investment and Securities.

The automaker is also positioning itself to take on its rivals in China, the world's largest market. It cut the prices of the Tucson ix35 and Santa Fe by 20,000 yuan and 8,000-30,000 yuan. Models developed to specifically cater to Chinese customers are also in the pipeline -- the new Tucson to be released on Sept. 5, and the new K5 and new Sportage later this year.

◆ Formidable Rivals

But it remains to be seen whether the Korean automakers will successfully compete against foreign rivals as global carmakers are slashing prices to dominate the Chinese market.

Volkswagen and GM, the No. 1 and No. 2 automakers there, cut the prices of their cars by more than 10 percent in the second quarter. Toyota, meanwhile, the world No. 1 in terms of sales volume, is improving its services in the U.S.

Ford is eyeing emerging markets and has launched compact cars with low price tags, including the Figo Aspire that hit the Indian market on Aug. 12.

"To survive in the long term, Hyundai has to boost investment in research and development, particularly to enhance the quality and design of new models", said Lee Hang-koo, a researcher at the Korea Institute for Industrial Economics and Trade.