Sedans and Missiles: Hyundai Slams Into Another Sales Roadblock

Steph Willems
by Steph Willems

The frustration never seems to end for Hyundai executives. After last year’s Korean labor strife and political scandal, the brand now faces flagging fortunes in the all-important North American market, all thanks to a car-heavy lineup that once guaranteed piles of profit.

Now, the automaker faces the same problem in another global growth engine — China. While that market has also discovered its love for crossovers and SUVs, there’s another problem that Hyundai can’t turn around by rushing a new vehicle to production. Hyundai, it seems, can’t do a damn thing about high-altitude defensive missiles.

Already battered by the Chinese crossover craze — which has seen competitors like General Motors clean up — Hyundai has become a victim of geopolitics.

Anti-Korean sentiment is nothing new to China, but the growing distrust and boycotting of South Korean products — a practice tacitly encouraged by the country’s Communist government — has hit a new high. In response to the nuclear ambitions of North Korea, a key Chinese ally, the South is literally on the defensive. Recently, news emerged that South Korea plans to deploy a U.S.-supplied Terminal High Altitude Area Defense (THAAD) missile battery.

With the first pieces of the missile shield now in place, the system should be fully operational by the end of the year. China isn’t pleased.

According to Bloomberg, Hyundai showrooms in the largest Chinese cities are ghost towns. A manager in a Shanghai dealership told the news agency that weekends will go by without a single person entering the showroom, and that half of his sales staff have already quit.

Reuters reports Hyundai and Kia sales fell a staggering 52 percent in March, year-over-year, as the boycott ramped up. Market share has shrunk to just 3.5 percent. As the automaker counts on China for about a quarter of its overseas sales, the THAAD battery keeping its Seoul headquarters safe from nuclear annihilation won’t save it from that incoming blow. Still, the company persists.

Hyundai plans to offer seven new China-only vehicles, including a gas-powered and electric SUV, to lure Chinese buyers into showrooms. Doing its part, Kia also has a China-only SUV the way.

Beijing Hyundai Motor Company executive Chang Won-shin holds out hopes that anti-Korean sentiment will blow over, telling Bloomberg he expects the business climate to “get better soon.” The company is expected to drop its first-quarter financial report later today, with Kia’s results coming tomorrow.

Steph Willems
Steph Willems

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  • AZFelix Hilux technical, preferably with a swivel mount.
  • ToolGuy This is the kind of thing you get when you give people faster internet.
  • ToolGuy North America is already the greatest country on the planet, and I have learned to be careful about what I wish for in terms of making changes. I mean, if Greenland wants to buy JDM vehicles, isn't that for the Danes to decide?
  • ToolGuy Once again my home did not catch on fire and my fire extinguisher(s) stayed in the closet, unused. I guess I threw my money away on fire extinguishers.(And by fire extinguishers I mean nuclear missiles.)
  • Carson D The UAW has succeeded in organizing a US VW plant before. There's a reason they don't teach history in the schools any longer. People wouldn't make the same mistakes.
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