Local firms toil to maintain 70% of auto marketCan the nation’s two leading automakers, Hyundai Motor and Kia Motors, hold onto a 70 percent share of the Korean car market in the face of tough challenges from imports?
According to a report released by the Korea Automobile Manufacturers Association on Friday, the two had a combined market share of 69.4 percent in the country through November this year, having lost the share steadily since 2009.
Hyundai had a 41.7 percent share, according to the report, while Kia had 27.7 percent.
With only three weeks remaining in the year, it’s questionable whether the sister companies will end 2014 with a 70 percent market share.
Hyundai and Kia rode high in 2009 with a 76.8 percent market share, but it has been declining every year since, hitting 74.6 percent in 2012 and 71.4 percent last year.
The companies tried to defend the 70 percent line by introducing some new models including the LF Sonata in the first half and the large sedan Aslan in October, but the figure has been under 70 percent since June.
The worst month of the year was September with 67.3 percent. This could be their first year under 70 percent since they recorded a 69 percent market share in 2007.
The main reason the market share dwindled this year was the poor sales performance of the midsize sedan Sonata LF, which was introduced in March. Hyundai aimed to sell 89,000 Sonatas, but it only sold 60,677 units through November.
They also introduced the Aslan in October to compete against German automakers’ best-selling models like the BMW 520d, but only 1,559 units were sold in the past two months.
For Kia Motors, its new Sorento SUV and Carnival van have been attracting consumers, but a partial strike in October affected the company’s production.
About 12,000 Carnival units ordered before the strike still need to be manufactured while about 9,000 Sorento units need to be delivered.
The ever-growing popularity of foreign brands led by German automakers BMW, Mercedes-Benz and Volkswagen is hurting Hyundai and Kia. The market share for foreign automakers in the country though November was 14 percent, with an accumulated sales volume of 179,239 cars this year, a 22.4 percent rise from a year ago.
Although Hyundai Motor and Kia Motors still hold the dominant market share, younger Koreans have been favoring imported brands, whose prices have been falling significantly in recent years.
Korean automakers have been losing the loyalty of its home base as high-quality imported models can now be bought for around 30 million won ($27,000).
“My wife and I were torn between a Volkswagen and Renault Samsung’s QM3,” said 39-year-old Kim, who drove a Kia Motors Carnival for nearly 12 years. “We didn’t see any reason why we had to stick with either a Hyundai Motor or Kia Motors model. It’s not like they are cheaper or anything.”
Hyundai said it will offer some discounts to people who own imported cars if they buy a Hyundai vehicle: a 500,000 won discount on the premium sedan Equus and 300,000 won for three models - the Veloster, i30 and i40.
“We are trying to achieve our goals [of selling more than eight million cars and to secure market share this year] by operating extra work shifts on the assembly lines and by strengthening our promotions,” said Hwang Kwan-sik, spokesman of Hyundai.
BY KWON SANG-SOO [firstname.lastname@example.org]