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How Hyundai lost momentum, and will 'take a few years' to recover

SEOUL/DETROIT/CHONGQING, China — At a near-empty Hyundai Motor showroom in the Chinese mega city of Chongqing, the store manager is grumbling about his shortage of customers and a lack of bigger, cheaper SUV models popular in the world's largest auto market. Even with discounting of as much as 25 percent, his dealership was selling barely a hundred vehicles a month, said the manager surnamed Li. A nearby Nissan dealership was selling about 400 vehicles a month, a store manager there said. "The sales are simply poor," Li told Reuters. "Look at the Nissan store next door, they have tens of customers while we just have two." An hour's drive away is Hyundai's massive $1 billion manufacturing plant, which opened last year with a target to produce 300,000 vehicles per year. But with sales weak and the Chinese auto market slowing sharply, the factory is running at roughly 30 percent of capacity, two people with knowledge of the matter said. The sources asked not to be identified because the information was not public. Hyundai, the world's fifth largest automaker, declined to comment on the Chongqing plant's production or the showroom's sales but said it is "closely cooperating" with local partner BAIC to turn around the China business. BAIC did not respond to requests for comment. Hyundai's woes mark a major reversal for the automaker which was an early success story in China as it quickly and cheaply rolled out popular new models into a surging market. In 2009, Hyundai and partner Kia's combined sales ranked third in China after General Motors and Volkswagen. The South Korean duo now ranks ninth, and its market share in China was 4 percent last year, from more than10 percent at the beginning of this decade. Executives and industry experts say Hyundai conceded its once stronghold in the low-end segment to fast-growing Chinese rivals such as Geely and BYD. Foreign rivals not only defended their turf in premium segments but also kept pricing competitive for mass-market models, squeezing Hyundai's positioning as an affordable foreign brand, they said. In the United States, the world's second-biggest auto market, Hyundai's market share fell to 4 percent last year, near a decade low. Hyundai ran into problems in China and the United States for similar reasons: It missed shifts in consumer tastes, especially the surge in demand for SUVs, and it sought higher prices than its brand image could command, four Chinese dealers and half a dozen former and current U.S.

Hyundai outlines EV strategy as it struggles with cost of engine defects

SEOUL — South Korea's Hyundai Motor pledged to boost sales of electric vehicles to over half a million by 2025 as part of a bid to focus on new technologies and catch up with rivals, but some analysts saw the target as conservative and warned of the costs. The announcement by Hyundai, the world's fifth largest car maker along with affiliate Kia Motors, underscores the accelerating strategy shift under Euisun Chung, who became the motor group's executive vice chairman last year. Hyundai announced a $35 billion investment last week in mobility and other auto technologies by 2025, less than a month after unveiling a $1.6 billion deal to develop self-driving vehicle technologies with Aptiv. The firm said on Thursday it plans to launch 16 EV models by 2025 to boost sales of such vehicles 17-fold to 560,000 by that year. Still, that would be equivalent to just over 10% of its projected global sales this year. The projection compares with more bullish forecasts offered by its bigger rivals. Volkswagen AG expects to make 22 million EVs over the next decade, while General Motors aims to sell 1 million EVs annually by 2026. "That is not an ambitious target. If Hyundai fails to boost volumes fast enough, costs of electric cars will weigh on profitability," Lee Jae-il, an analyst at Eugene Securities & Investment. Hyundai said that the EV market would face intensifying competition and oversupply soon and automakers failing to meet toughening European emissions regulations will face heavy penalties and suffer a serious blow to their reputation. "EV supply is expected to surpass demand from the second half of next year," Ka Suk-hyun, vice president of Hyundai Motor, told an earnings conference call. Quality issues Hyundai's third-quarter net profit rose 59% to 427 billion won ($365 million), well below the average 684 billion profit estimate of analysts based on Refinitiv data, due to 600 billion won provisions it earmarked to address potential engine defects in the United States and South Korea. Quality issues have been a major drag in Hyundai's attempt to steer a recovery from six consecutive annual profit declines and constrained its financial firepower to invest in future technologies. It is still under investigation by U.S regulators and prosecutors over potential faulty engines in some models. Total retail sales fell 3% in the third quarter, as higher U.S.

Hyundai's first N-performance car is hidden under the RN30 concept

Hyundai is moving ever closer to revealing their first high-performance N brand car, and the RN30 is the latest step in that direction. The concept is based on the new i30 hatchback, which was also revealed in Paris, and shares the engine that will power the i30N that comes out next year. It's obvious that the RN30 isn't a stock car, although the engine is closer to reality than the wild bodywork. The basic block will power the i30's fast sibling, but the rest of the four-cylinder has been given the racing treatment. A bigger turbo and forged internals combine to create 375 horsepower and 333 lb-ft of torque sent to all four wheels. It also comes with an electronic limited slip differential and a dual-clutch transmission. Don't count on this powertrain coming to market, despite how cool it would be to see a South Korean Focus RS. However, it is a sign the i30N will have a potent foundation. Draped around the powertrain is a race-ready body that is 30 mm wider and 84 mm shorter than the standard i30 and comes with all the requisite vents, wings, and diffusers. Bucking convention, this car not have carbon fiber body panels. For weight savings, Hyundai enlisted the help of BASF to craft some new lightweight plastics for the car. To save more weight, Hyundai gutted the interior down to the bare necessities. Whatever was left was then moved as low as possible, including the seats, to bring down the center of gravity. Although almost everything about the RN30 is about going faster, not all of it is. Or at least not directly. In classic concept car fashion, the RN30 still gets at least one gimmicky feature. On the interior side of each A-pillar is a camera mounted in an image-stabilizing gimbal, and in the top fin, there is another forward facing camera. Hyundai says these record the car on track and the driver, with the idea being that the driver can cut together video of a track day to share with friends. As previously mentioned, don't expect to see the production i30N to pack this much power when it hits the road next year. However, if it comes even remotely close to the performance of this concept, it should be a very entertaining hot hatch. Odds are good that it will come to the US as well, since the i30 will arrive here next spring as the Elantra GT. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.