Hit hard by growing negative sentiment towards Korean brands following the South Korea’s deployment of United States’ Terminal High Altitude Area Defense (THAAD) anti-missile system, Korea’s largest automaker Hyundai Motor Co. and its smaller sister company Kia Motors Corp. have seen their combined sales in China last month plunge 63% from a year ago. According to local sources in the Chinese auto industry on Monday, total sales of Beijing Hyundai Motor Co. and Dongfeng Yueda Kia Motors Co. - each joint venture of Hyundai Motor and Kia Motors in China - sank 63 percent to 52,000 units in June from 142,000 a year ago. Beijing Hyundai and Dongfeng Yueda Kia Motors sold 35,000 units and 17,000 units, respectively. Cumulative sales volume of Beijing Hyundai and Dongfeng Yueda Kia Motors in the January-June period also plummeted 47 percent to 429,000 units from last year’s 808,000 units. Such drastic sales decline in the Chinese market has weighed on Hyundai Motor and Kia Motors’ overall global sales, with their combined global sales in the first six months of this year sliding 8.7 percent on year to 3,518,566 units. The sales plunge suggests that performance of Korea’s two largest carmakers in the world’s largest auto market could be worse than worried, rapidly losing their ground to local rivals amid the ongoing diplomatic row that began in March over Korea’s deployment of U.S. missile shield. Consumers in China have been boycotting Korean brands in retaliation against the neighboring country’s decision to install the THAAD system. Chinese peers have been capitalizing on the loss of Hyundai and Kia in the domestic market and expanding their presence. China’s major portal Sohu warned that the Korean car makers may repeat the fate of Japanese peers that nearly halted their sales operations in China in 2012 with some even withdrawing production lines when China and Japan were in a territorial dispute over East China Sea. According to the portal, the THAAD row has come at a perfect time for Chinese carmakers who have been actively seeking ways snatch away the market share of the Korean brands in the world’s biggest auto market. Concerns are rising over how long sales and operation networks of Hyundai Motor and Kia Motors in China can withstand the falling sales without any immediate sign of thawing ties between the two countries. In general, car dealers start to seek other car brands with higher demand when they see no hopes of prompt recovery in demand for current brands. Hyundai Motor and Kia Motors would lose a number of dealers and their small components suppliers unless the two countries work hard to resolve the THAAD dispute as soon as possible. By Park Man-won and Woo Je-yoon [ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
South Korea's Hyundai and Kia saw their combined car sales in China plummet 63% year on year last month because of the increasingly negative sentiment towards South Korean brands after the country deployed the US Thaad missile defence system. The results revealed that performance at Korea’s two largest car manufacturers may be worse than predicted, as they rapidly lose ground to rivals because of the diplomatic row. Consumers in China have been boycotting South Korean brands in retaliation since the neighbouring country installed Thaad.