Desperate Times Lead Hyundai Into an All-Ideas-On-Deck Strategy

Steph Willems
by Steph Willems
desperate times lead hyundai into an all ideas on deck strategy

Amid stagnating U.S. sales, a crash-dive in China, and a product lineup not optimally suited for growth, Hyundai is furiously crafting a salvation plan.

In North America and other utility-loving countries, the strategy is clear: more crossovers and a significant product shakeup. The little Kona is already on the way, though perhaps not as quickly as Hyundai had hoped.

China, however, presents a serious problem for the automaker. What was supposed to be a growth market for the company has now turned into the opposite. Hyundai’s share of the market has shrunk to 5 percent from last year’s 8.1 percent, which was down from years past. In March alone, after news of South Korea’s installation of a U.S.-supplied anti-missile defense system, Hyundai and Kia sales dropped 52 percent.

Determined to make the Chinese fall back into love, the automaker has a plan brewing.

According to Reuters, step one will be the creation of a brand experience center in Beijing’s artsy-fartsy 798 Art District. The center, which Hyundai believes will help would-be buyers familiarize themselves with the brand, will open in September.

“We’re not going to show a real car,” a company executive told Reuters. “This space is only for focusing on brand building.”

In China, Hyundai products are often viewed as lesser automotive fare, positioned well below Japanese and American brands. The brand center will try to get across the message that Hyundais are not just for taxi drivers.

Step two is all about product, with a small, China-only model expected to appear in November, sources say. That unnamed model is slated for production at a Chinese factory. If the utility vehicle isn’t enough to get the brand noticed, the company is reportedly considering dangling its upcoming Kia Stinger sports sedan in front of status-chasing drivers.

The third step is more complicated. While Hyundai has always planned to bring its Genesis luxury brand to China, possibly as early as next year, the automaker is now considering building some models in that country. By shipping knock-down kits to China, Hyundai would be able to slash import tariffs and prevent its joint venture partner from getting its hands on Hyundai technology.

“We are agonizing over how to source local parts and secure enough sales to build the Genesis cars,” a Hyundai source told Reuters.

[Image: Genesis Motors]

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  • Bd2 Bd2 on May 31, 2017

    China is a problem - always thought it was stupid for H/K to have invested so much in China, esp. Hyundai which wanted to build a factory at a certain location, but the central govt. wouldn't let them unless they built another factory at a diff. location first (so, Hyundai ended up building both in what was already a saturated market). H/K is better off expanding in markets not beholden to the whims of the central govt. - which is why Hyundai has been expanding its presence in India and Kia is planning on entering the market and building a plant there. Even tho having only entered the market about 2 yrs ago, Kia is on track to be the 6th or 7th best selling brand in Mexico and has been making gains in Australia and Europe - so it's not all horrible news as things are going pretty well in other markets. But for the time being, China will be a drain as one of the worst things for an automaker's bottom-line is to have its plants running below capacity.

    • Vulpine Vulpine on May 31, 2017

      Remember, H-K belongs to mainland China now and has for about 20 years or so. It's no longer a question of H-K 'investing' in China so much as China demanding the 'investment.'

  • Fred Fred on May 31, 2017

    How the hell did Hyundai's sales problems turn into a distopian trolling comment fest about Trump? Unsubscribe.

  • Denis Jeep have other cars?!?
  • Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
  • Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
  • ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"
  • ToolGuy When Farley says “like the Millennium Falcon” he means "fully updatable" and "constantly improving" -- it's right there in the Car and Driver article (and makes perfect sense).