Korean cars are eaten all over the world, why are they "unadaptable" in China? The hope of rising is very slim

In 2023, the auto market can be called a battle of the gods. After the finale, major car companies began to announce the "results" of the previous year. And the MVP in 2023 is undoubtedly easily won by Toyota's sales of more than 10 million.

Toyota, Volkswagen, and Hyundai Kia, the three giants undoubtedly occupy the top three in the global car sales list, but there is one data that may particularly attract everyone's attention, that is, the global joint sales of 7.3 million South Korean car companies Hyundai Kia, sales in the Chinese market are indeed miserable.

Whether it is German or Japanese, they are eating very well in the Chinese market, why are Korean cars not adapting to the water and soil? Could it be that as netizens said, there is a smell of kimchi in Korean cars?

Korean cars have suffered from deformed development

Although Hyundai Kia is the third in sales, compared with Toyota and Volkswagen, Hyundai Kia has actually been shaky since last year.

Hyundai-Kia's global sales last year were 6.84 million, followed by Nissan's three major alliances and Stellantis with 6.25 million and 6.05 million, respectively.

This year, although Hyundai-Kia has widened its sales gap with the fourth and fifth places, it is still at risk of being squeezed out of the top three at any time. The reason for this is largely due to the fact that Korean cars are struggling in the Chinese market.

In the whole of last year, Hyundai's sales in China were only 240,000 units, and Yueda Kia was even more pitiful, with only more than 80,000 units, which was even less than the 90,000 units sold in '22. You know, Hyundai-Kia's global sales are 7.3 million units, but the Chinese market only accounts for 300,000 of them, which is only a fraction.

This kind of serious lame achievement made Korean cars almost say goodbye to the second and first places forever. After all, there is an old Chinese saying that the one who wins the Chinese market is the world.

But to some extent, this is also a kind of strength, because even if you erase the sales of these 30 cars in the Chinese market, Hyundai-Kia is still the third largest car company in the world in terms of sales.

If we list the performance of more than 200 automakers in China, we will find that the situation of Korean cars is far worse than we think. Kia's sales reached about 3 million last year, setting a new record in both sales and operating profit.

However, the Chinese market is in a miserable delisting situation. With annual sales of just over 80,000 units, it ranks only 49th among all vehicle brands, and it can be said that it is on the edge of a cliff, and it is more dangerous than Hyundai, which ranks 22nd with sales of 300,000 units.

Of course, there are also related Kia Motors Group employees who explain that the lack of local sales points has a certain impact on sales.

Korean cars have long been defeated in the past

The big difference with Korean cars is that German and Japanese cars have been like fish in water since they entered the Chinese market. Last year, Toyota's sales in the Chinese market reached more than 2.02 million units. Compared with Korean cars, it is not an exaggeration to use the word "cloud and mud".

If Hyundai-Kia can have half of Toyota's performance, then the total global sales can exceed the 8 million mark, not to mention the gap with the fourth and fifth, and even surpassing the Volkswagen is within reach.

Despite the fierce offensive of domestic cars, Toyota has maintained a stable market share in the Chinese market. Toyota's two major partners, FAW Toyota and GAC Toyota, sold 800,000 and 1 million units respectively last year, and their performance was very stable.

Although Volkswagen has given Toyota the world's No. 1 position, it has surpassed Toyota in terms of market share in China. Volkswagen AG is pursuing a multi-brand strategy such as Volkswagen, Audi and Skoda, and sold 2.99 million vehicles in China alone last year.

Although FAW-Volkswagen and SAIC-Volkswagen saw their performance decline last year due to the impact of the rise of domestic brands, they both exceeded 1 million units overall.

The reason why Volkswagen can become a "Volkswagen" brand is not only its people-friendly name and price, even Volkswagen's luxury car brand Audi sold 640,000 vehicles in China last year, which is more than three times the sales of Toyota Lexus, a luxury car of the same class.

Another unexpected data is that Volkswagen's Porsche has annual sales of 94,000 units in the Chinese market, and I wonder how Kia Motors will feel when it sees this data.

In comparison, the sales volume of Genesis with Audi and Lexus Imperial City PK is only 1,400 units, and I think many netizens may have never heard of this brand of car.

The market share of Korean cars is challenged by the competition for cost performance

Korean cars are not without a glorious history. From 2013 to 2016, Hyundai Motor and Kia achieved sales of 1 million units in the Chinese market for four consecutive years. However, unlike German and Japanese cars, Korean cars have not established a solid "national premium".

This means that consumers do not have a strong sense of national identity with Korean cars, and in contrast, they do not have the advantage of "Japanese car premium" like Japanese cars.

The THAAD incident in 2017 was the trigger for a sharp decline in sales of South Korean cars in the Chinese market. For reasons of irresistibility, South Korean cars suffered a boycott movement, which led to a significant contraction in sales. In stark contrast, Japanese vehicles such as Toyota, Honda, and Nissan have not been similarly affected in the Chinese market and remain firmly positioned.

Compared to Hyundai Motor and Kia, Honda and Nissan, which are slightly inferior to the world market, have achieved high sales in China with the "Japanese car premium". Honda sold more than 1.37 million units in China last year, while Nissan sold more than 800,000 units.

This shows the strong position of Japanese vehicles in the Chinese market. Nissan, the mainstay of the Renault-Nissan alliance, sells more than twice as much in China as Hyundai and Kia.

In fact, Korean cars and Japanese cars take the same cost-effective route, commonly known as Japanese replacement, but in terms of price, Korean cars are not cheaper than Japanese, no matter how you compare, if you choose between Japanese and Korean, you must prefer Japanese cars.

Local Chinese automakers such as BYD and Geely are regaining market share that was previously dominated by Hyundai and Kia.

BYD leads the way in sales of its flagship electric vehicles, with sales of more than 1.6 million units, a year-on-year increase of 122%. State-owned companies such as Geely Automobile and Changan Automobile have also achieved quite good sales results.

The rise of domestic brands has made Chinese people have more choices in car purchases, and Korean cars are a small and transparent piece in the current Chinese market, and now everyone is even less likely to think of Korean cars when buying a car.

epilogue

Korean cars are not the first brand to fail in the Chinese market, and former losers Ford and Stellantis have long since disappeared from the streets of China, and if Hyundai and Kia cannot turn things around in a short period of time, it is very likely that they will follow in the footsteps.

Of course, a Hyundai Motor official also admitted that the Chinese market is a supermarket that is absolutely impossible to give up, and Hyundai Motor will increase its investment in electric vehicles and pay attention to the Chinese market to regain market share in China.

Do you think that the Korean car is "no longer saved, bury it quickly", or "can it be rescued again"?