Korea: Hyundai and Kia to accelerate launching SUVs and electrified vehicles

2018 production and sales expected to fall below prior-year level; GM Korea to close Gunsan Plant

2018/05/21

Summary

韓国の自動車生産・販売・輸出台数

Korean vehicle production in 2017 declined by 2.7% year-over-year (y/y) to 4.12 million units. Sales in Korea (excluding the imported cars) fell 2.5% to 1.56 million units. Exports from Korea also dropped 3.5% to 2.53 million units while imports increased by 3.5% to 233,000 units. According to the outlook announced by Korea Automobile Manufacturers Association (KAMA) at the end of December 2017, production in Korea for 2018 is expected to drop 0.4% y/y to 4.1 million units due to reduced domestic demand. Sales in Korea are projected to decrease for the second consecutive year and fall 1.9% y/y to 1.53 million units owing to a weakened effect from new model releases and unstable labor-management relations. Meanwhile, exports from Korea will rise 1.6% to 2.57 million units. Imports to the country are also expected to grow 9.8% to 256,000 units as VW and Audi will resume sales which were banned in the wake of the Dieselgate scandal.

In the Korean market, the Hyundai Motor Group's share expanded slightly in 2017 after a period of decline its overseas sales, however, decreased due to a strong Won and stagnant sales in China and the U.S. In China, the Group's sales plunged due to the effect of deployment of the THAAD anti-missile system in Korea. The company also faces a problem of excess production capacity. In the U.S., the Group's profits declined owing to an increase in the ratio of fleet sales and boosted incentives. The reliability of Hyundai Group vehicle quality decreased as the company issued repeated recalls for its vehicles. In 2018, the Group aims to increase its sales by launching new SUVs and electrified vehicles including the NEXO FCV and the Niro EV in global markets.

GM Korea has sustained significant losses for four consecutive years since 2014 and decided to close its Gunsan Plant to restructure operations. In the spring of 2018, the automaker agreed with its labor union on a self-help plan including a wage freeze. It also agreed with the Korean government that GM and Korea Development Bank will make further investments to revive GM Korea. As a result of these efforts, it could avoid being placed under bankruptcy protection. However, the Detroit carmaker has been aggressively addressing underperforming businesses globally and is still considering the reduction of unprofitable operations in Korea.

While Renault Samsung's sales in Korea were stagnant, its exports registered a record high in 2017 with strong sales of the flagship QM6 SUV. The automaker's global sales for 2018 are expected to be the same level as the previous year.

Ssangyong ceased production of the Chairman W, its only passenger car, in September 2017, and will focus on production and sales of SUVs, MPVs, and pickup trucks. The company has put a plan to build a new plant in China on hold due to Seoul's decision to deploy the THAAD anti-missile system. At the same time, alongside its parent company, Mahindra & Mahindra, Ssangyong has also been seeking opportunities to enter the U.S. market.



Korean vehicle production, sales, exports and imports

(Units)

2013 2014 2015 2016 2017 2018
(Outlook)
Jan.-Mar.
2017
Jan.-Mar.
2018
Production in Korea 4,521,429 4,524,932 4,555,957 4,228,509 4,114,913 4,100,000 1,040,971 962,803
Sales in Korea 1,383,358 1,463,893 1,589,393 1,600,154 1,560,202 1,530,000 429,417 426,583
Exports from Korea 3,089,283 3,063,204 2,974,114 2,621,715 2,530,194 2,570,000 628,172 573,852
Imports to Korea 156,497 196,359 243,900 225,279 233,088 256,000 54,966 67,405

Source: Korea Automobile Manufacturers Association (KAMA)
(Note) 1. Sales in Korea do not include imported cars.
2. 2018 outlook for production, sales and exports was announced by KAMA at the end of 2017 while that for imports was disclosed by Korea Automobile Importers and Distributors Association (KAIDA) at the end of 2017.



Related Reports:
OEM Electrification Strategies: Strengthening HVs and diversifying into EVs, PHVs, and FCVs (May 2018)
Indian Auto Expo 2018: Exhibitions from Maruti Suzuki, Hyundai/Kia, Honda, and Toyota (Feb. 2018)
Hyundai Motor: Launching the Genesis luxury brand and Ioniq green car series (May 2017)
Hyundai: Global sales fall 100,000 units for 2015 1H (Oct. 2015)
Korea aims to produce 4.6 million vehicles in 2014 (May 2014)





Korean automakers' production capacity of 4.56 million in Korea and 5.33 million overseas

In Korea, vehicle production capacity currently totals 4,818,000 units but will decrease to 4,558,000 units by the end of May 2018 since GM Korea plans to close its Gunsan Plant. Hyundai Motor Group has a production capacity of 3,435,000 units, accounting for approximately 75% of the total capacity. In July 2017, Hyundai Motor Company announced a plan to invest KRW 300 billion in the second plant in Ulsan to set up a flexible production line for manufacturing different types of vehicles on a single line and to upgrade its facilities.



Vehicle production capacity in Korea by OEM

Plant Annual production capacity
(1,000 units)
Production in 2016
(1,000 units)
Models and movement
Hyundai Motor Ulsan 1,410 1,395 Hyundai Accent, Kona, Avante (Elantra), Tucson, Santa Fe, Ioniq, Genesis, i30, i40, etc. In July 2017, Hyundai announced a plan to invest KRW 300 billion in a second plant to set up a flexible production line for manufacturing different types of vehicles without changeovers.
Asan 300 228 Hyundai Grandeur (Azera), Sonata
Jeonju 100 56 Hyundai buses and trucks
Kia Motors Hwasung 555 510 Kia K3 (Forte, Cerato), K5 (Optima), K7 (Cadenza), Niro, Sorento
Gwangju 490 499 Kia Sportage, Carens (Rondo), AM, Soul, Soul EV, trucks and buses
Sohari 330 318 Kia Stinger, Stonic, Pride (Rio), Carnival, Ray, K9 (Quoris/K900)
Seosan 250 230 Kia Morning (Picanto), Ray (The Seosan Plant is a joint venture established with Donghee.)
GM Korea Bupyeong 440 342 Chevrolet Aveo (Sonic, Gentra), Malibu, Captiva, Trax
Gunsan 260→0
(May 2018)
34 Chevrolet Orlando, Cruze GM Korea plans to close the plant by the end of May 2018.
Changwon 210 199 Chevrolet Beat/Spark (Matiz), Opel Karl/Vauxhall Viva, Labo, Damas
Ssangyong Pyongtaek 146 156 Chairman H, Chairman W, Rexton, Korando, Tivoli
Renault Samsung Pusan 300 244 SM3, SM5, SM6, SM7, QM6 (Koleos), SM3 Z.E., Nissan Rogue
Daewoo Bus Tongrae, Ulsan 7 3 Buses
Tata Daewoo Gunsan 20 9 Trucks
Annual production capacity in Korea totals 4,818,000 (4,558,000 after June 2018) with 3,435,000 held by Hyundai Motor Group

Source: Each OEM's website and others


Hyundai Motor Group's overseas production capacity totals 5.33 million units. It is expected to increase to 6.41 million units after Hyundai Motor Company expands capacities at its plants in China and India, and Kia Motors completes construction of its fourth plant in China and first plant in India.

In January 2018, Kia Motors disclosed a plan to increase production at its Mexican plant by 40% to export vehicles to new markets in Latin America, the Middle East, and Africa. Kia Motors is aggressively reducing its dependence on the U.S. market, where it shipped 50% of its Mexican production in 2017, down from 75% in 2016. In 2017, shipments to Canada and Latin America accounted for 15% and 20%, respectively and the remaining 15% was sold in Mexico.



Hyundai Motor Group's overseas production capacity

Annual production capacity
(1,000 units)
Production in 2016
(1,000 units)
Outline
Hyundai Motor India 680→730
(2019)
665 The Grand i10, i20, Accent (Verna), Elantra (Avante), Creta, Tucson, Eon and Xcent are built. In March 2018, Hyundai announced a plan to increase its annual production capacity by 50,000 units with an investment of INR 65 billion.
Turkey 210 218 The i20 and i10 are assembled at a plant in Turkey. It is Hyundai Motor's export hub to Europe.
China 1330→1660
(2018)
1,142 The factory of Beijing Hyundai Motor manufactures the Sonata, Elantra, Tucson, Verna, ix25 and Santa Fe. Hyundai Motor invested CNY 6,224 million to build its fifth plant in Chongqing which began operations in July 2017. It will have an annual capacity of 300,000 units within 2018.
170 39 A commercial vehicle plant operated by Sichuan Hyundai Motor, a fifty-fifty joint venture established by Hyundai and Sichuan Nanjun Automobile.
U.S. 400 379 The Sonata, Elantra and Santa Fe are assembled in the country.
Czech Republic 350 308 The ix20, i30, i30cw and ix35 are produced.
Russia 200 207 The Solaris developed for Russia, Creta, and Kia Rio are built.
Brazil 180 159 The HB20, a compact hatchback designed for Latin America, and the Creta are produced here. A third shift was added from September 2013.
Kia Motors China 890→1,000
(to be scheduled)
647 A Dongfeng Yueda Kia Motors plant assembles the Sportage, Forte, K5, K4, K3, K2 and KX3. When a fourth plant is completed, Kia's total production capacity in China will reach a million units per year.
Slovakia 300→450
(to be scheduled)
263 The cee'd, pro cee'd, Sportage and Venga are produced here.
U.S. 360 478 The Sorento, Optima and Hyundai Santa Fe are built here.
Mexico 260→400
(2018)
108 The Forte (Cerato/K3), Rio and Hyundai Accent are assembled here. Operations started in May 2016.
India 0→300
(2019)
- Kia is constructing a new plant in Anantapur, Andhra Pradesh state, with an investment of USD 1.1 billion. The new plant is expected to start production of a compact sedans and compact SUVs in the latter half of 2019.
Hyundai Motor Group's total annual capacity 5,330→6,410 4,613

Source: Hyundai Motor Global Plant Sales, Kia Motors Plant Sales

 

 



Hyundai Motor Group aims to boost sales by launching new SUVs and electrified vehicles

Hyundai Motor Group's global sales expected to grow 4.1% to 7.49 million units in 2018

Struggling in China and the US in 2017 Hyundai Motor Group's global sales (total shipments of vehicles produced in Korea and overseas) decreased by 8.6% y/y to 7.2 million units in 2017, far below the target of 8.25 million units. While sales in Korea increased by 1.4% to 1.21 million units, exports fell 4.0% to 2.03 million units and shipments of vehicles produced overseas declined 13.2% to 4.04 million units.
One reason that the Group's overseas sales plunged is the dispute between Korea and China over Seoul's decision to deploy the THAAD anti-missile system. Hyundai Motor's overseas sales fell 31.3% y/y and Kia Motors' dropped 44.6% y/y partly due to Chinese consumers' unofficial boycott of Korean cars. In the U.S., the Group's lineup of SUVs and pickup trucks, which have been popular among consumers, saw reduced sales due to a limited lineup. The Group also experienced lowered profits due to an increase in the ratio of fleet sales and incentive spending.
2018 plan In January 2018, Hyundai Motor Group announced its 2018 outlook that its global sales are expected to grow 4.1% y/y to 7.49 million units.
Hyundai Motor Hyundai Motor aims to improve its profitability through its regional management system. The automaker intends to increase its sales by launching the Kona, a new compact SUV, the NEXO, a next-generation fuel cell vehicle, the new Santa Fe, and the Kona EV in global markets.
Kia Motors ・Korea: New models (K3 and K9) and K5/Carnival PE to boost sales momentum. Niro EV to be introduced.
・US: Expect new model launches of Stinger, Forte, K900 and Niro EV.
・Europe: New model launches (Ceed, Ceed Sportswagon). Niro EV to comply with Euro 6.
・China: Strengthen SUV lineup with country specific strategic models (NP, QE).
・Kia plans to roll out its WiBLE car sharing service in Europe in the latter half of 2018. (This service was launched in Korea in 2017.)
Midterm plan
(announced in Jan. 2018)
Hyundai Motor ・18 green vehicles to be launched by 2025.
・Level 4 autonomous driving vehicles to be commercialized from 2021.
Kia Motors ・16 new electrified vehicles (five models each for HV, PHV and EV as well as one FCV) to be launched by 2025.
・A FCV to be introduced in 2020.
・Level 4 autonomous driving vehicles to be commercialized from 2021.

Kia Niro EV Hyundai Nexo FCV
Kia Niro EV Hyundai Nexo FCV



Hyundai Motor Group's shipments (wholesales)

(Units)

2014 2015 2016 2017 2018
(Plan)
Jan.-Mar.
2017
Jan.-Mar.
 2018
Hyundai Motor Vehicles produced in Korea 1,878,532 1,867,166 1,666,932 1,651,318 - 380,029 381,621
(thereof:) Sales in Korea 683,532 712,313 656,526 687,380 701,000 161,657 169,203
(thereof:) Exports 1,195,000 1,154,853 1,010,406 963,938 3,974,000 218,372 212,418
Vehicles produced overseas 3,083,345 3,095,863 3,191,001 2,836,995 709,571 645,874
Total 4,961,877 4,963,029 4,857,933 4,488,313 4,675,000 1,089,600 1,027,495
Kia Motors Vehicles produced in Korea 1,706,002 1,724,864 1,550,809 1,502,095 1,478,000 377,315 338,415
(thereof:) Sales in Korea 464,563 526,638 533,042 518,474 520,000 120,867 123,771
(thereof:) Exports 1,241,439 1,198,226 1,017,767 983,621 958,000 256,448 214,644
Vehicles produced overseas 1,335,046 1,325,108 1,467,285 1,205,622 1,340,000 281,017 283,870
Total 3,041,048 3,049,972 3,018,094 2,707,717 2,818,000 658,332 622,285
Group total Vehicles produced in Korea 3,584,534 3,592,030 3,217,741 3,153,413 - 757,344 720,036
(thereof:) Sales in Korea 1,148,095 1,238,951 1,189,568 1,205,854 1,221,000 282,524 292,974
(thereof:) Exports 2,436,439 2,353,079 2,028,173 1,947,559 6,272,000 474,820 427,062
Vehicles produced overseas 4,418,391 4,420,971 4,658,286 4,042,617 990,588 929,744
Total 8,002,925 8,013,001 7,876,027 7,196,030 7,493,000 1,747,932 1,649,780

Source: Hyundai Motor Sales Performance, 2017 Annual Business Results (Jan. 25, 2018); Kia Motors Monthly Sales Performance, 2017 Business Results (Jan. 25, 2018)
(Note) Exports refer to those of completely built-up vehicles from Korea and do not include KD kits.



Hyundai Motor's new model launch plan (2018)

(Note) Launch time shows the time of launch in Korea unless otherwise specified.
(This also applies to the following table.)

Model Launch Outline
New Santa Fe Feb. 2018 The fourth-generation model of the midsize SUV. The five-passenger Santa Fe Sport is now called the Santa Fe, while the three-row seven-passenger model was renamed the Santa Fe XL. The gasoline version comes with a 2.4-liter gasoline direct injection engine (GDI) or 2.0-liter turbocharged engine, and the diesel version is equipped with a 2.2-liter turbocharged engine. All engines are mated to a new eight-speed automatic transmission. In the U.S., the gasoline and diesel version will be released in the summer of 2018 and in 2019, respectively.
New Veloster Feb. 2018 A subcompact sports coupe. The model is powered by a 1.4-, 1.6- or 2.0-liter four-cylinder turbocharged engine. It will be released in the U.S. in the second quarter of 2018.
NEXO Mar. 2018 A compact fuel cell SUV. This FCV has a range of 609 km on a full charge with a refueling time of five minutes. Its price is set at KRW 68.9 million for the Modern trim and KRW 72.2 million for the Premium trim. The central government's subsidy is KRW 22.5 million, and the regional government's subsidy ranges from KRW 10 million to KRW 12.5 million.



Kia Motors' new model launch plan (2018)

Model Launch Outline
New K3/K3 Euro Feb. 2018 The third-generation model of a compact sedan/hatchback. The model is sold as the Forte/Forte 5 in North America. It comes with a 1.6-liter four-cylinder gasoline engine.
New K9 Apr. 2018 A full-size sedan that is Kia's flagship model. The sedan is sold as the K900 in North America. It is equipped with a 3.3-liter V6, 3.8-liter V6 or 5.0-liter V8 engine.
New Ceed/Ceed Sportswagon 2Q/4Q 2018
(Europe)
A five-door hatchback/sports wagon. The third-generation models of the new Ceed series that was changed from the cee'd series. There are three gasoline engine options including a 1.0-/1.4-liter turbocharged or 1.4-liter naturally aspirated engine as well as a 1.6-liter diesel engine option adopting the SCR technology.
Niro EV 3Q 2018 A compact SUV based on the Hyundai Ioniq. The model is equipped with a 64 kWh lithium-polymer battery pack paired with a 150 kW electric motor. It has a range of 383 km on a full charge. Its annual sales target is 4,500 units in Korea and 16,600 units overseas.

 

 



Loss-making GM Korea to restructure its business with government's bailout

GM Korea averts bankruptcy filing with labor cost reductions and government's bailout

Stagnant operations since 2014 While GM Korea is positioned as an export hub to Europe and emerging countries, its exports have been decreasing due to the sale of Opel and a revision of the strategies for emerging countries. In 2017, its production fell 10% y/y. Its revenues have been sluggish since 2014. GM Korea has recorded net losses for four consecutive years and posted KRW 3.134 trillion in accumulated net losses from 2014 to 2017.
Closure of Gunsan plant In February 12, 2018, GM Korea announced a plan to close its Gunsan Plant by the end of May 2018 to restructure its operations. The utilization rate of the plant has been around 20% for the past three years and it has recorded significant losses for several years. GM estimates that it will reduce costs by USD 400-500 million annually by closing the plant.
Agreement with labor union and government GM had been discussing with its labor union and the Korean government the rebuilding of GM Korea's business. In March 2018, GM and its union reached a tentative agreement on freezing wages, abolition of bonuses, and reduction of welfare expenditure.
According to the news report by Reuter on May 2, 2018, GM and the Korean government agreed in April 2018 to invest USD 7.15 billion in GM Korea. Of the total investment, state-run Korea Development Bank, which owns a 17% stake in GM Korea, will invest USD 750 million. GM will inject USD 3.6 billion, and GM Korea's existing loan of USD 2.8 billion from GM will be converted into shares. GM will add production of two new models at its Korean plants and pledged to remain in the Korean market for at least ten years. GM Korea is expected to return to profitability by the end of 2019. However, GM may reduce its unprofitable business in Korea in the future as the automaker has been selecting businesses and focusing investment in growth areas.
Launch of new models GM Korea plans to import the Chevrolet Equinox midsize SUV from the U.S. starting in June 2018 to increase sales in Korea. The model comes with a 2.0-/1.5-liter gasoline turbocharged engine or a 1.6-liter diesel engine. The automaker will also release the face-lifted Chevrolet Spark in May or June 2018.



GM Korea's vehicle production, sales and exports for Korea

(Units)

2012 2013 2014 2015 2016 2017 Jan.-Mar.
2017
Jan.-Mar.
2018
Production in Korea 785,757 782,721 629,230 614,808 579,745 519,385 148,177 51,924
Passenger cars 568,776 429,439 304,426 305,247 272,885 208,089 67,215 46,357
SUV/CDV 199,673 328,280 318,608 295,714 296,509 303,778 78,389 3,667
Trucks 6,620 10,928 2,670 6,227 5,479 3,829 1,279 1,001
Buses 10,688 14,074 3,526 7,620 4,872 3,689 1,294 899
Sales in Korea 145,702 151,340 154,381 158,404 180,275 132,378 37,649 16,851
Exports from Korea 655,878 629,966 476,755 462,729 416,195 392,396 105,540 100,339

Source: KAMA
(Note) CDV stands for Car Derived Van. (This also applies to the following tables.)

 

 



Renault Samsung's global sales expected to be at prior-year level of 270,000 units in 2018

Renault Samsung enjoys increased exports of the QM6 flagship SUV

Reduced sales in Korea and increased exports for 2017 Renault Samsung experienced a drop of 9.5% y/y in sales in Korea with 100,000 units in 2017, ranking fifth behind Ssangyong. Meanwhile, Renault Samsung was the only automaker in Korea that enjoyed increased exports. Its exports totaled a record high of 176,000 units, up 20.5% y/y. Exports of the QM6 flagship SUV increased eight times over the previous year to 44,000 units.
Modest global sales target for 2018 According to the 2018 plan announced by Renault Samsung in February 2018, its global sales are expected to be 270,000 units, which remains unchanged from the previous year. Of the total sales, 100,000 units will be sold in Korea while 170,000 will be shipped overseas. In 2018, the company intends to pay closer attention to customers’ voices and enhance its competitiveness. Its new model launch plan includes the Clio hatchback and an electrified commercial van.
Construction of vehicle test center In March 2017, Renault Group and Daegu City in southern Korea signed a Memorandum of Understanding on building Korea Intelligent Automotive Parts Promotion Institute (KIAPI) and a vehicle test center. The company will test new models and develop EVs, Advanced Driver Assistance Systems (ADAS) and autonomous driving technologies at the vehicle test center.
Export of new Koleos to Europe On March 26, 2017, Renault Samsung started export of the new Koleos flagship SUV (sold as the QM6 in Korea) to Europe. The Koleos is produced at the Busan plant in Korea for export to 80 nations in the world except for China. 40,000 units of the Koleos were exported to global markets by the end of 2017.
Release of new SM3 Z.E. On November 23, 2017, Renault Samsung unveiled the new SM3 Z.E., the second-generation three-box saloon EV. The model has a range of 213 km, up 57% compared to its predecessor. The capacity of the battery was increased to 36 kWh while its weight remained unchanged.



Renault Samsung's vehicle production, sales and exports for Korea

(Units)

2012 2013 2014 2015 2016 2017 Jan.-Mar.
2017
Jan.-Mar.
2018
Production in Korea 153,891 129,638 152,138 205,059 243,965 264,037 66,081 64,758
Passenger cars 100,013 79,951 70,486 59,103 84,040 69,520 18,797 11,771
SUVs/CVDs 53,878 49,687 81,652 145,956 159,925 194,517 47,284 52,987
Sales in Korea 59,926 60,027 80,003 80,017 111,101 100,537 25,958 19,555
Exports from Korea 94,383 70,983 89,851 149,065 146,244 176,271 40,161 45,345

Source: KAMA

 

 



Ssangyong to start production of knockdown kits of Rexton in India

Ssangyong focusing on SUVs, MPVs and pickup trucks; to assemble knockdown kits of SUV in India

Ceasing production of Chairman W in 2017 Ssangyong's sales in Korea increased by 3.0% y/y to 107,000 units in 2017. The automaker ranked fourth, surpassing Renault Samsung. Its exports decreased by 29.1% y/y to 37,000 units. Ssangyong ceased production of the Chairman W, its flagship sedan and only passenger car, in September 2017. It has been focusing on production and sales of SUVs, MPVs and pickup trucks since then.
2018 sales plan According to the 2018 plan announced by Ssangyong in January 2018, its global sales are expected to be 200,000 units. Sales in Korea will increase by 3.1% y/y to 110,000 units while overseas sales are projected to be 90,000 units.
Suspending new plant in China; mulling entry into the US Ssangyong signed a letter of intent with Shaanxi Automobile Group to establish a joint venture in China in October 2016. The joint venture planned to build an assembly plant with an annual production capacity of 150,000 units as well as an engine plant in the Xi'an Economic and Technological Development Zone by the end of 2019. However, it seems unlikely for the Chinese government to approve the plan due to the Seoul-Beijing dispute over the deployment of the THAAD anti-missile system in Korea since the beginning of 2017. Meanwhile, Ssangyong and its parent company Mahindra & Mahindra (M&M) have been seeking opportunities to enter the U.S. market. They are working on the possibility of entering the U.S. in 2020.
Export of knockdown kits of Rexton to India On February 12, 2018, Ssangyong signed a product licensing agreement with M&M, its parent company, to assemble the Rexton (sold as the G4 Rexton in Korea), its flagship SUV, in India. Ssangyong will export knockdown kits of the Rexton to India. Assembly of the kits is scheduled to start at M&M's Chakan Plant in the latter half of 2018.



Ssangyong's vehicle production, sales and exports for Korea

(Units)

2012 2013 2014 2015 2016 2017 Jan.-Mar.
2017
Jan.-Mar.
2018
Production in Korea 119,142 143,516 140,259 145,633 155,600 145,345 36,369 30,694
Passenger cars 4,577 3,430 2,458 1,359 919 314 129 0
SUVs/CVDs 114,565 140,086 137,801 144,274 154,681 145,031 36,240 30,694
Sales in Korea 47,700 63,970 69,036 99,664 103,554 106,677 24,350 23,988
Exports from Korea 71,553 78,740 70,847 44,877 52,200 37,008 9,878 6,676

Source: KAMA

 

 



Hyundai Motor Group regains market share in Korea in 2017

In the Korean passenger car market, Hyundai Motor Group saw its market share fall from 71.7% in 2012 to 48.8% in 2016, but regained a share of 51.3% in 2017. Hyundai Motor Company's share expanded from 28.7% to 32.9% while Kia Motors' share declined from 20.1% to 18.4% with stagnant sales of its K series. GM Korea's share decreased to 10.7% with falling sales of the Chevrolet Spark compact hatchback. Ssangyong expanded its share to 9.2%, driven by strong sales of its SUVs. Renault Samsung's share fell to 8.7% with reduced sales of the SM6 midsize sedan. 韓国のブランド別乗用車市場シェア

Korean sales of passenger cars by brand

(Units)

2013 2014 2015 2016 2017 Market share
2016 2017
Hyundai 479,433 378,177 374,500 341,322 380,808 28.7% 32.9%
Kia 403,219 260,280 248,057 239,216 213,588 20.1% 18.4%
GM Korea 130,378 147,104 146,424 169,035 123,808 14.2% 10.7%
Ssangyong 63,970 69,036 99,664 103,554 106,677 8.7% 9.2%
Renault Samsung 60,027 80,003 80,017 111,101 100,537 9.3% 8.7%
Imports 156,497 196,359 243,900 225,279 233,088 18.9% 20.1%
Total 1,293,524 1,130,959 1,192,562 1,189,507 1,158,506 100.0% 100.0%

Source: Korea Automobile Manufacturers Association (KAMA)

 

 



Imports expected to grow 9.8% with resumption of sales of VW and Audi

New registrations of imported cars in Korea for 2017 increased by 3.5% y/y to 233,000 units. It was a minor increase as sales of VW and Audi vehicles were banned due to the Dieselgate scandal. By brand, two German brands dominated the higher rankings. Mercedes-Benz ranked first with sales of 69,000 units (29.5% of import market), followed by BMW which sold 60,000 units (25.6%). Lexus and Toyota ranked third and fourth, selling 13,000 and 12,000 units, respectively. By engine displacement size, vehicles with the displacements lower than 2.0 liters accounted for 58.5% of import registrations, while cars with displacements between 2.0 and 3.0 liters totaled 33.9%. By engine type, the ratio of diesel-powered vehicles decreased from 58.7% in 2016 to 47.2% in 2017. Meanwhile, gasoline-powered vehicles accounted for 43.0%, up from 33.9% in 2016.

The Korea Automobile Importers and Distributors Association (KAIDA) announced in December 2017 that it projects new import registrations will grow 9.8% y/y to 256,000 units in 2018. While protective trade policies of several countries and consumers' weaker sentiment caused by higher interest rates are negative factors, resumption of sales of Audi and VW vehicles, new model launches by every brand, and increasing green vehicles including HVs and EVs are positive factors. As a result, 2018 will see growth in imported car sales.



Imported car sales in Korea by brand

(Units)

Brand 2016 2017 Yoy
Sales Market share Sales Market share
Mercedes-Benz 56,343 25.0% 68,861 29.5% 22.2%
BMW 48,459 21.5% 59,624 25.6% 23.0%
Lexus 10,594 4.7% 12,603 5.4% 19.0%
Toyota 9,265 4.1% 11,698 5.0% 26.3%
Land Rover 10,601 4.7% 10,740 4.6% 1.3%
Ford/Lincoln 11,220 5.0% 10,727 4.6% -4.4%
Honda 6,636 2.9% 10,299 4.4% 55.2%
MINI 8,632 3.8% 9,562 4.1% 10.8%
Chrysler/Jeep 5,959 2.6% 7,284 3.1% 22.2%
Volvo 5,206 2.3% 6,604 2.8% 26.9%
Nissan 5,733 2.5% 6,285 2.7% 9.6%
Audi 16,718 7.4% 962 0.4% -94.2%
VW 13,178 5.8% 0 0.0% -100.0%
Others 16,735 7.4% 17,839 7.7% 6.6%
Total 225,279 100.0% 233,088 100.0% 3.5%

Source: Korea Automobile Importers and Distributors Association (KAIDA)

 

 



Production forecast by LMC Automotive: Korean light vehicle production expected to be 4.28 million units in 2021 (LMC Automotive, March 2018)

(LMC Automotive, March 2018)

韓国のブランド別ライトビークル生産予測

A key point to watch in Korea's future production forecast is any prospective action taken by the GM Group from now on. The automaker had already announced that it will shutter its Gunsan Plant by the end of May 2018 and warned that it may take further measures if it fails to normalize its business in Korea through negotiations with the Korean government. According to LMC Automotive's forecast (March 2018), Korean light vehicle production is expected to fall by 2.9% year-over-year (y/y) to 3.95 million units in 2018. Thereafter, total output will increase and reach 4.28 million units in 2021, up 5.2% compared to 2017.

Output at the Korean plants of Hyundai Group, the largest automaker in the country, declined by 1.9% y/y in 2017, due to yet more union strikes in the final quarter of the year. The group's production volume is projected to be stagnant as a result of a weaker domestic market and the automaker's decision to shift production of its low-margin models to its emerging-market plants. Both Kia and Hyundai have now opted to retire their sub-compact vehicles in Korea, citing the gloomy outlook for the segment. Instead, both brands plan to produce more small SUVs. Hyundai is expected to retain its Korean plants as a production hub for its high-margin vehicles, including SUVs, high-end models under the Genesis brand, and electric models like the Hyundai IONIQ and Kia Niro. LMC Automotive forecasts that Hyundai Group's production in Korea is expected to drop by 1.2% y/y to 3.10 million units in 2018. However, in and after 2019, the group's output will increase and reach 3.51 million units in 2021, up 12.1% compared to 2017.



Korean light vehicle production forecast by make (LMC Automotive, March 2018)

(Units)

SALES GROUP GLOBAL MAKE 2015 2016 2017 2018 2019 2020 2021
Total 4,501,078 4,175,720 4,064,256 3,947,100 4,094,484 4,206,136 4,277,426
Hyundai Group Hyundai 1,818,132 1,586,088 1,535,628 1,567,638 1,594,157 1,646,833 1,706,457
Kia 1,714,584 1,549,936 1,518,784 1,422,931 1,554,655 1,593,380 1,577,773
Genesis 1,828 60,386 81,077 108,609 140,118 189,849 230,326
Hyundai Group sub-total 3,534,544 3,196,410 3,135,489 3,099,178 3,288,930 3,430,062 3,514,556
General Motors
Group
Chevrolet 599,040 569,394 511,867 455,292 413,735 373,609 359,433
GMK 13,847 10,351 7,518 9,895 9,467 0 0
Buick 2,955 0 0 0 0 0 0
General Motors Group sub-total 615,842 579,745 519,385 465,187 423,202 373,609 359,433
Renault-Nissan-
Mitsubishi
Renault 78,777 100,197 135,168 115,983 110,945 128,673 126,386
Nissan 117,565 136,982 122,542 118,384 106,559 108,002 112,079
Renault Samsung 8,717 6,786 6,327 4,743 4,602 0 0
Renault-Nissan-Mitsubishi sub-total 205,059 243,965 264,037 239,110 222,106 236,675 238,465
Mahindra Group Ssangyong 145,633 155,600 145,345 142,884 155,681 160,961 160,415
Tata Group Tata Daewoo 0 0 0 741 4,565 4,829 4,557

Source: LMC Automotive "Global Automotive Production Forecast (March 2018)"
(Note) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
For more detailed information or inquiries about forecast data, please contact LMC Automotive.


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Keyword:
Korea, Hyundai, Kia, GM, Renault Samsung, Ssangyong

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