Hyundai's sales in China is tanking, forced to sell off one plant

Last year, Hyundai Motor Group sold 3.74 million cars across the globe. As of March 2021, in its home market, both Hyundai and Kia have almost a 80 percent market share.

As impressive as it may seem, Hyundai is struggling to stay afloat in China.

Also Read: Hyundai-Kia’s 80% market share worries Korea, Malaysia indifferent with Proton/Perodua

Sales of Hyundai in China have been declining since 2017, dropping from 1.14 million units in 2016 to 785,006 units in 2017. Last year, amidst the Covid-19 pandemic, Hyundai sold 502,000 units.

Which Hyundai models did Chinese buyers prefer?

For the South Korean marque, while their best-selling model is the Hyundai Elantra, sales of the model does not come close to its rivals, namely the Honda Civic, Nissan Sylphy, and Toyota Levin (Toyota Corolla Altis to us).

In April, Hyundai sold 7,614 units of the Elantra in China – a far cry compared to December 2020, when Beijing Hyundai sold 19,400 units – the best month for the Elantra throughout its lifespan.

For context, rivals such as the Nissan Sylphy (42,172 units), Toyota Corolla (24,106 units), and Honda Civic (21,548 units) outsold the Elantra by a wide margin. The Elantra also failed to topple domestic brands like Geely, which managed to sell 16,306 units of the Dihao in April.

Also Read: Can the 2021 Hyundai Elantra beat the Civic and Corolla Altis?

The second best-selling Hyundai model in China is the Hyundai Celesta. Beijing Hyundai managed to sell 4,002 units of the Celesta in April, a far cry from November 2020 whereby 10,900 units were sold.

Why is Hyundai’s sales so poor in China?

Hyundai’s sales weren’t always poor to begin with, as they managed to sell an average of one million units a couple of years ago, driven by their affordable prices relative to Japanese, German, and American marques back then.

However, Hyundai’s sales started to drop as Chinese consumers started to buy more domestic brands, like Changan and Geely. Hyundai went as far as developing China-specific models for the market like the Hyundai Lafesta, Hyundai Mistra, and Hyundai Celesta, but that plan did not pan out well, as Beijing Hyundai ended up shutting down Beijing No.1 plant in 2019. 

According to a report from China, said plant could be taken over by Li Auto, after being idle for two years. Li Auto has reportedly invested RMB 6 billion into the plant, which could be the company's second plant in addition to its Changzhou plant.

Li Auto is the brainchild of Chinese billionaire Li Xiang, the founder of Chinese portal Autohome. After successfully taking Autohome to public-listed status, Li Xiang went on to create Li Auto, an EV-only brand. Li Auto's current model is the Li Xiang One, a range-extender EV (REEV). 

Despite selling off one plant, Beijing Hyundai still has three plants in China, name in Beijing, Chongqing, and Hebei.