April 26, 2024

• 

[THE INVESTOR] Hyundai Motor and Kia Motors continued to struggle in the US market last month, as Korea’s top two automotive companies have missed out on the SUV boom, industry watchers said on July 4.

In June, the combined sales of the two plummeted 14.9 percent on-year in the US, where they sold a total of 110,650 units, according to the automakers.

Hyundai Motor suffered a greater sales decline and sold less vehicles than its sister company Kia Motors. Hyundai sold 54,507 units last month, including sales posted by its luxury Genesis brand, down 19.3 percent on-year, the company said. Kia Motors posted 56,143 units in sales, down 10.3 percent on-year, the company said.

“Due to cheap oil prices, demand for SUVs and pickup trucks has been growing in the US. Hyundai was late to cash in on the boom,” said Lee Sang-hyun, an analyst at IBK Investment & Securities.

Poor performances of Hyundai’s top-selling midsize sedan Sonata and compact sedan Avante, known as Elantra in the US, last month, due to carmakers there offering bigger incentives, was also a reason for the sales drop, Lee added.

According to market researcher ALG, Hyundai Motor and Kia Motors each provided US$3,259 and US$3,384 per vehicle as incentives, lower than the US market average of US$3,550.

The overall US auto market decreased 3 percent on-year in June, and 1.4 million new vehicles were sold, according to market researcher Autodata.

Kia Motors outperformed Hyundai on increased sales of the K3, K5 and K7 -- sold as Forte, Optima and Cadenza, respectively, in the US -- along with the small SUV Niro posting steady monthly sales of some 2,000 units, Lee said.

Among the three sedans, the Forte compact sedan was the most sold last month with 11,387 units, up 24.2 percent on-year, the company said.

In terms of sales posted between January and June this year, Hyundai Motor totaled 2.1 million units, which is 8.2 percent less compared to 2016, the company said. Kia Motors sold 1.3 million units, down 9.4 percent on-year in the first half of this year.

“Anti-Korean sentiment in China due to the THAAD deployment here dealt a blow to the carmakers’ overall sales in the first half of this year. Improved relations with China through the G-20 summit and other measures could rebound sales in the near future,” Lee said.

“Japanese carmakers had suffered from disputes over Senkaku Islands (Diaoyu in Chinese) in 2012 for about four months.”

Seeking to foster sales in the world’s biggest auto market China, Hyundai and Kia will each introduce two new models there in the second half of this year, the company said.

Hyundai Motor will debut a new version of the ix35 SUV, which was designed for motorists in China, while Kia Motors’ will introduce the Pegas compact sedan, the company said.

Other local automakers also showed an overall drop in sales in the first half of this year.

GM Korea, the local unit of US carmaker General Motors, saw a 9.3 percent on-year drop in sales and sold 278,998 units from January to June this year, the company said.

Sales of SsangYong Motor, the Korean unit of India’s Mahindra & Mahindra, also slid 5.7 percent on-year, totaling 70,345 units in the cited period, the company said.

The carmaker, however, noted that sales in the domestic auto market rose 5.5 percent on strong sales of its premium large G4 Rexton released in April.

Meanwhile, Renault Samsung Motors, the Korean unit of French carmaker Renault, was the only local carmaker that saw an increase in sales.

The automaker sold 135,895 units in the first half of this year, up 9.7 percent on-year, the company said.

Lee said Renault Samsung Motors had not rolled out a new model last summer, while other local carmakers did. 

By Kim Bo-gyung/The Korea Herald (lisakim425@heraldcorp.com)