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

by Steph Willems

May 30th, 2017 10:32 AM

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]

#China #Genesis #Hyundai #Kia #ProductPlanning #Production #Sales

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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.

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- 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.'
  
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Fred on May 31, 2017

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

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