Not exactly pouncing out of dealerships

Not exactly pouncing out of dealerships

It was launched with great fanfare only last year but sales of the Aslan, Hyundai's import-fighter, continue to disappoint. This is worrying news for HMG in its home market.

Hyundai Motor Group's largest brand is not having a happy 2015. Believing that the Aslan can take on the European cars that have become so popular with South Koreans has proved to be wrong. Moreover, in the US, something once unthinkable happened. Have a look at these numbers for May: KMA: 62,433. Hyundai: 63,610. Kia Motors America has never been that close to outselling HMG's alleged number one brand. Will it have happened in June? Probably not, as HMA will be throwing everything it has at staying ahead of KMA.

Back in South Korea, things look terrific. On the surface. The Sonata took back the number one slot in May in a market up by 0.2%, and 2% for the year to date. HMC has 45.7% and Kia Motors has 33.1% with GM Korea just failing to reach double digits (9.9%) as the next biggest OEM in the year to the end of May. Totals for the domestics are as follows:

  • Hyundai: 273,277
  • Kia: 197,572
  • GM: 59,124
  • SsangYong: 36,990
  • RSM: 30,507

The Sonata was once the boringly predictable top dog at home. No longer. The latest model has managed to grab first place in just two of the previous ten months, with the Hyundai Porter in the lead for the year to date. Sonata profits would be far juicier than those garnered from an LCV. Sales totals for these vehicles are 40,710 for the Sonata and 41,683 for the Porter. These are followed by the Kia Morning, Hyundai Grandeur, Hyundai Avante, Kia Sorento, Hyundai Santa Fe, Kia Carnival and Hyundai Tucson, with the Kia Bongo (an LCV) rounding out the top ten for the year to date.

Kia looks to be doing OK, but the K5 is fading, its sales down 33% last month. The market no doubt knows that a new model is just months away, and the same applies to the Chevy Spark, which will soon be succeeded by a car that will share much with the Opel Karl. SsangYong, incidentally, has a hit on its hands with the Tivoli, this small SUV taking 2.8% of the May market with 3,437 units, which was some 400 more than Kia sold K5 sedans. The Tivoli was also more popular than the Kia Sportage (2,902 registrations in May) but its replacement will be launched by year-end after a world premiere at the Frankfurt IAA in mid-September.

Genesis, which is a brand in South Korea, is doing OK. Its sales, at 15,400, give it 2.6% of the market but the Tivoli will push it down a spot into 17th place in June, to judge by the rate at which each has been selling.

Crucially, the big thing which HMG has been needing to do, it appears unable to do. Namely, convince a new generation of Koreans that domestic is best, in both the mass market and premium segments. The Aslan's performance sums up all that is going badly for the group. This front-wheel drive sedan is aimed directly at the Audi A4 but during the first five months, just 4,459 have been registered. In May, only 504 were sold, compared to 593 Alpheons (GM Korea's rebadging of the Buick LaCrosse) and only 47 units ahead of the pricey Hyundai Equus which itself was down by 42%.

What can HMG do? Not a lot. The rise of imports, with Volkswagen, Audi, BMW and Mercedes-Benz leading the charge, is something that should have been happening a long time ago. What we are seeing is the normalisation of the South Korean market. Buyers want more choice and while the majority will remain loyal to the domestic makers (of which three are foreign owned - by GM, Mahindra and Renault), HMG should simply accept that creating ever more luxury cars for Hyundai and Kia won't work. Perhaps expanding Genesis' model range and creating a new premium division for Kia could be the longer term answer?

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