March 2022 news: Yueda Investment, one of the shareholders of Dongfeng Yueda Kia, announced that it would abandon the capital increase and at the same time remove vehicle manufacturing from its main business. In November last year, Dongfeng Motor listed the transfer of 25% of the equity of Dongfeng Yueda Kia, which was taken over by Yueda Automobile. So far, the car company jointly established by Kia Co., Ltd., Yueda Investment and Dongfeng Motor in 2002 has changed from a "three-person line" to a "two-person transfer" of Kia and Yueda.
Behind the equity change, it reflects that the Korean car has changed from a "darling" to a "abandoned child". Dongfeng Yueda Kia has had brilliant achievements, the launch of Maxima sedan successfully opened the small car market, and then seized the cruise taxi market business opportunities, listed the "far ship", and introduced the "standardized fleet procurement" of the large customer sales model into the domestic market.
Imported of Ofiles, Sorento, New Jiale, Freelancer, Sportage, as well as Dongfeng Yueda Kia's Serato, Jawa and other models, with its pragmatic appearance and high cost performance, has won the favor of many consumers. By 2016, sales of 650,000 units peaked, ranking 11th among Chinese passenger car companies.
However, with the overall decline in the market, consumer boycotts of Korean companies, dealers and other factors, Dongfeng Yueda Kia sales took a sharp turn, plunging 44% to 359,500 units the following year. By 2021, only 163,400 vehicles remained, only a quarter of its peak, down 35.3% year-on-year.
The company is also in a quagmire of losses, with net profits of -1.123 billion yuan, -492 million yuan, -1.299 billion yuan and -4.75 billion yuan in 2017-2020, respectively; in the first 10 months of last year, this figure reached -2.612 billion yuan. That is to say, the cumulative loss in the past five years has exceeded 10 billion yuan. As of the end of the third quarter, net assets were -611 million yuan.
Hyundai Motors, which belongs to the same group, performed more than satisfactorily. Despite the launch of new cars such as the new generation of Mingtu, the new Tucson, and the first MPV model, the Kustu, Beijing Hyundai's cumulative sales last year were only 385,000 units, down 23% year-on-year, and the fifth consecutive year of decline. This figure is only 68% compared to the target of 560,000 vehicles set at the beginning of the year. In the top 15 sales list, it is no longer seen.
Just as the so-called success and xiao he defeat also Xiao He, Beijing Hyundai once relied on high cost performance, sales exceeded one million for four consecutive years, and reached a peak in 2016 (1.14 million vehicles). However, it also ignored the control of product quality and the creation of brand image, and as a result, it was defeated in the pinch between the upward of its own brand and the downward of the European and American joint venture brands. Its first plant has been sold to Ideal Automobile, and rumors that the second plant will be sold to Xiaomi and that the Chongqing plant will be sold to Ideal again continue to flow.
For a long time, hyundai and Kia brands have been occupying more than 95% of the korean car market share. According to the data released by the China Association of Automobile Manufacturers, in the past six years, the market share of Korean cars in China was 7.35%, 4.63%, 4.98%, 4.7%, 3.8% and 2.4%, respectively, showing an overall downward trend. In January, that number was just 1.7 percent.
It is worth mentioning that last year, Hyundai Kia Group's global sales reached 6.668 million units, up 5% year-on-year, jumping to fourth, behind Toyota, Volkswagen and the Renault-Nissan-Mitsubishi alliance. Total sales in China were 548,400 units, down 27.3 percent, the highest of any multinational car company, and the share also fell from 11.9 percent to 8.2 percent.
Of course, Hyundai Kia Group does not want to give up the world's largest automotive market. In 2022, Beijing Hyundai will optimize its product matrix, focusing on brand competitive models such as the 7th generation Elantra, the 5th generation Tucson L, ix35 and Kustur. Kia will increase its investment in the Chinese market, starting from the pure electric model EV6, launching a new electric model every year, and gradually building a new EV matrix of six electric vehicles by 2027. The turnaround battle of the Korean car is long and obstructive.