Bruised by anti-South Korean sentiment in its biggest market and losing ground to local automakers, Hyundai Motor Co is to open its first Chinese brand store, and might locally assemble its premium Genesis cars and accelerate the launch of a sport-utility vehicle (SUV), people familiar with the plans said.
The measures are aimed at rebooting the South Korean firm’s branding in China, where many see Hyundai as a lower-end maker of city taxis.
Hyundai and its affiliate Kia Motors Corp were not long ago ranked third among foreign car brands in China, but sales have been hit by a consumer backlash over South Korea’s deployment of the US-implemented anti-missile Terminal High Altitude Area Defense system, which Beijing opposes.
Photo: Reuters
Analysts say the diplomatic row masks broader problems for Hyundai/Kia in China: poor brand recognition and a model line-up struggling against local brands’ cheaper SUVs.
“Hyundai has an in-between brand that doesn’t have a clear identity in China, and there’s the backdrop of poor China-Korea relations,” said James Chao (趙英智), Shanghai-based Asia-Pacific chief of consulting firm IHS Markit Automotive. “Newly introduced SUVs should help, but they are late to the game.”
Even before the missile systems row, Hyundai/Kia’s China market share tumbled to 8.1 percent last year, the lowest in eight years, while this year, it has slid further to 5 percent.
To help its identity crisis, Hyundai in September is to open a brand “experience” center in Beijing’s 798 Art District, a trendy hub of refurbished factory buildings. Hyundai has three similar centers in Seoul and one in Moscow.
“We’re not going to show a real car. This space is only for focusing on brand-building,” said Xu Jing, the Hyundai executive in charge of the project.
The center was planned before the political tensions, but its completion is now a key plank in Hyundai’s efforts to regain a lost position in China as local automakers and European brands gain ground.
Volvo-owner Geely Holding Group (吉利控股集團) and Great Wall Motor Co (長城汽車) are also looking to move upmarket.
The branding store ventures into territory traditionally held by premium names such as Daimler AG’s “Mercedes me” stores and BMW AG’s brand centers, already in China.
Hyundai is also considering using complete knock-down kits shipped from South Korea to assemble Genesis cars in China — more than halving import tariffs to 10 percent — two people familiar with the matter said.
Building Genesis cars from kits in China would also prevent technology leaking to its local joint venture partner, BAIC Automotive Group (北京汽車), one of the people added.
The kits are a first step, one Hyundai insider said.
“We are agonizing over how to source local parts and secure enough sales to build the Genesis cars,” they said.
Hyundai launched its Genesis luxury sedan in 2008, and two years ago spun it off with the larger Equus sedan into a standalone premium brand.
The company has not decided which Genesis model it is to build in China first, but plans to have six models, including a sports sedan and two SUVs, under the premium marque by 2020.
“While the Genesis brand is reviewing a variety of strategies for the China market, no specific decisions have been made yet,” Hyundai said in a statement.
Hyundai sold 74 Genesis sedans in China last year, down from 1,016 in 2015. It sold a single Equus, down from 10 the previous year, according to export data.
Hyundai might also move forward the launch of a small SUV, codenamed NU, to be built at its fourth factory in China, by a month to November, one of the people said.
Kia is also considering launching the Stinger, its first sports sedan, in China, people with direct knowledge of the matter said, although there are no plans to build the model there.
Hyundai said it also plans to apply new, cutting-edge technologies such as connectivity and advanced driver assistance systems to many products from the second half of this year, and to introduce six new-energy vehicles soon.
Since starting to make cars in China in 2002, Hyundai has aggressively chased sales and market share by selling both older and new versions of models including the Elantra and Sonata sedans and the Tucson SUV.
Among foreign car brands, Hyundai’s China sales lag behind only those of General Motors Co and Volkswagen AG, but it is generally seen as more lower-end than US, German and Japanese rivals.
Beijing Hyundai has supplied about one-fifth of the capital’s taxis.
The volume sales model “did wonders for sales growth, but dented the Hyundai image in the minds of Chinese buyers,” consultancy Dunne Automotive president Michael Dunne said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”