Sales have fallen to a fraction of their peak, leaving Hyundai with less than 1 percent of the world’s largest car market
With China-specific electric models, the company is betting on localization to rebuild its standing
José Muñoz, president of Hyundai Motor, speaks during a media event for Auto China 2026 on April 24. <Hyundai Motor>
[Insight Korea = Kim Dong-su]
Sales have fallen to a fraction of their peak, leaving Hyundai with less than 1 percent of the world’s largest car market
With China-specific electric models, the company is betting on localization to rebuild its standing
For Hyundai Motor, China was once a land of opportunity. In 2016, the company sold more than 1.14 million vehicles there, setting an all-time record. Considering that Hyundai’s domestic sales in South Korea stood at about 710,000 vehicles last year, the scale of China’s importance to the company at the time is clear.
China, which overtook the United States in 2009 to become the world’s largest auto market, was never just another overseas market for Hyundai. In 2016, when Hyundai reached its peak in China, the country’s passenger car market totaled 23.834 million vehicles. Success or failure in a market with the world’s largest demand was a key factor shaping global sales rankings and brand status.
Last Year’s Sales: 128,000 Vehicles, Less Than 1 Percent Market Share
The good years did not last. After the THAAD dispute, Chinese consumers began turning away from Korean brands in earnest, and the effects of the so-called Korean culture ban dealt a direct blow to sales. As a result, Hyundai’s sales in China have been on a downward trajectory since 2016.
The weakness is clear in recent sales figures. According to Hyundai Motor’s business reports, the company sold 250,000 vehicles in China in 2022, 242,000 in 2023 and 125,000 in 2024. Last year, sales edged up to 128,000 vehicles, but the gap with Hyundai’s former standing remained stark. Its market share was about 0.53 percent. Hyundai, a core brand of a group now ranked among the world’s top three automakers by vehicle sales, has been pushed below even 1 percent in the world’s largest market.
Market leadership has already shifted toward Chinese companies. According to data on the share of domestic brands in China’s passenger car market, cited by KOTRA from the China Commercial Industry Research Institute, Chinese brands accounted for just 38.4 percent of the market in 2020. By 2022, that figure had risen to 49.9 percent, nearly half the market. In 2024, it jumped to 65.2 percent.
The upward trend appears to be continuing this year. According to Gasgoo, a Chinese automotive industry publication, Chinese brands’ share reached 69.5 percent last year, approaching 70 percent. The gain reflects the combined force of government policy support, technological competitiveness centered on batteries and software, and the economies of scale provided by China’s vast domestic market.
One auto industry official said he had test-driven a high-end hybrid model from a Chinese brand and found it difficult to identify clear weaknesses in driving performance, braking or steering quality.
“It gave the impression that it was not lacking even when compared with global automakers,” the official said.
The gap felt even larger in mass-market electric vehicles priced in the 30 million won range, he added. “It was not simply a matter of thinking, ‘This is fairly well made,’” he said. “It felt clearly superior to Hyundai.”
China, in other words, is no longer the relatively easy market it once was. As domestic brands improve both price competitiveness and technology, and as they take control of the market, foreign automakers are finding less room to maneuver. Even so, Hyundai is once again targeting China. Since the launch of a new management structure led by President José Muñoz, the company has begun reorganizing its entire China strategy and has started what amounts to a “return to China.” Its goal is to reach annual sales of 500,000 vehicles by 2030.
Hyundai Unveils First China-Specific Ioniq Model, Betting on Localization
For Hyundai, China is not a market it can give up. Its symbolic importance as the world’s largest auto market is significant. But for Hyundai Motor Group, now among the world’s top three automakers, China is also a matter of corporate pride. The major markets where Hyundai has yet to find a clear breakthrough are essentially China and Japan. Rebuilding its China business is therefore not merely about recovering sales. It is a test of Hyundai’s standing as a global brand.
The card Hyundai has chosen to play is localization. The company appears to have concluded that the old method of bringing global models into China and selling them there offers little chance of success. Behind the shift is the recognition that Chinese consumers’ expectations for price, technology, design and digital experience must be reflected from the product development stage.
The first step was the Elexio, unveiled last October. The Elexio is a locally targeted electric SUV designed for Chinese consumers. At Hyundai’s 2025 CEO Investor Day last September, Mr. Muñoz said the company planned to introduce the Elexio, its first electric vehicle to be produced locally in China.
“It is a C-segment vehicle capable of traveling 700 kilometers and a case that shows Hyundai’s commitment to the Chinese market,” he said.
The change became even clearer at Auto China 2026, which opened on April 24. About six months after unveiling the Elexio, Hyundai introduced another electric vehicle for China, the Ioniq V. It is the first China-specific model under the Ioniq brand and is designed to reflect the lifestyle of local customers.
Particularly notable is Hyundai’s cooperation with Chinese partners. The battery was developed with CATL, the Chinese battery giant. For its advanced driver assistance system, Hyundai partnered with Momenta, a Chinese autonomous-driving company. In the battery and software fields, which are central to electric vehicle competitiveness, Hyundai is seeking to combine with the local ecosystem and build products that meet Chinese consumers’ expectations.
Mr. Muñoz’s message was clear. Under the strategy “In China, For China, To Global,” he said Hyundai intended to help define the future of mobility in China. The statement signaled that Hyundai does not see China merely as a place to recover sales, but as a testing ground for its future mobility strategy and a base for global expansion.
Experts say the most urgent task for Hyundai as it tries to re-enter the Chinese market is to secure competitiveness. They argue that the company needs more than simple cost reduction; it must redesign procurement and production across the board.
“Hyundai first needs to think about how it can make vehicles more cheaply in China,” said Cho Chul, a senior research fellow at the Korea Institute for Industrial Economics and Trade. “It must build a procurement system that can compete with Chinese brands and make its production system more efficient.”
He added that Hyundai should also consider ways to actively use the innovation achieved by Chinese companies. “At the same time,” he said, “Hyundai must also work to create clear points of differentiation of its own.”
-This article was translated by ChatGPT. (이 기사는 챗GPT가 번역했습니다.)
댓글
0