Hyundai KIA Domestic Market Share Drops to Below 70%
D-Bo , Jan. 9, 2015, 11:01 a.m.
The domestic market share of Hyundai Motor and affiliate Kia Motors plunged below 70 percent last year. This is the first time that the conglomerate saw its market share drop so low since Hyundai bought out rival Kia at the height of the Asian financial crisis in 1998.
The Korea Automobile Manufacturers Association on Thursday said Hyundai and Kia sold 1.15 million vehicles in Korea last year, accounting for 69.2 percent of total car sales here. That marks a drop of more than seven percentage points since 2009, when the two accounted for 76.7 percent.
Meanwhile the market share of foreign carmakers surged from 4.2 to 11.8 percent over the same period. Their sales rose more than 20 percent annually over the last three years.
The 70-percent market share was viewed by experts as the first Maginot Line. Lee Hang-koo at the Korea Institute for Industrial Economics and Trade said, "Imported carmakers are targeting younger consumers with mid and low-priced cars priced between W30 million to W40 million, which is posing a serious threat" to domestic rivals (US$1=W1,097).
Another problem is that Hyundai and Kia continue to jack up the price tags of their new models, which ends up weakening their price competitiveness against imports. And domestic rivals GM Korea and Renault Samsung are also selling more cars here. GM Korea sold a record number here last year, which marked the 12th anniversary of its launch in Korea, while Renault Samsung's sales surpassed 80,000 vehicles, up around 33 percent compared to 2012.
Hyundai and Kia are now betting on upgraded versions of their popular Avante compacts, K5 sedans and Tucson and Sportage SUVs that will come out this year, while increasing the lineup of diesel and hybrid models favored by younger consumers.