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Hyundai to introduce new cars in China to halt slump

(Agencies)
Updated: 2008-02-27 16:05

Hyundai Motor Co, whose China venture's sales fell 20 percent in 2007, will introduce three models, boost its marketing and open a new plant to reverse the slump in the world's fastest-growing major auto market.

"Our key products have been in the market for a long time and lost their charm," Noh Jae-man, president of Beijing Hyundai Motor Co, the Korean automaker's Chinese venture, said in an interview yesterday. This year, "we are turning around with new model launches and the expansion of dealerships."

Beijing Hyundai aims to boost sales about 65 percent this year to 380,000 vehicles helped by the introduction of the HDC, its first model specifically designed for China. New or revamped cars were introduced at a rate of about one every four days in China last year.

"The HDC is a nice, competitive car, which will be a big plus for Hyundai in China," said Huang Zherui, an analyst with CSM Asia in Shanghai. "China is a buyer's market now and only companies with the right products can win."

Beijing Hyundai will also add a medium-sized sedan around the year end and may begin making Hyundai cars for export. At least 47 local and overseas carmakers sell vehicles in China, compared with 17 in the United States, the world's largest auto market.   

Beijing Hyundai was China's fifth-biggest automaker in 2006. It fell out of the top 10 last year as it lost market share to Volkswagen AG and General Motors Corp because of an aging model line-up.

The venture plans to open its new plant and introduce the HDC on April 8. The carmaker aims to sell 100,000 HDCs this year. It also expects to sell 40,000 of the new medium-size sedans within the first year of sales. Hyundai will start China sales of imported Genesis premium sedans in May, said Noh.

China's surging economic growth helped boost passenger car sales 22 percent in 2007 to 6.3 million, the third straight year of growth exceeding 20 percent. GM, the biggest overseas automaker in China, boosted sales 19 percent. Sales at Volkswagen, ranked second, climbed 28 percent. Toyota Motor Corp posted a 62 percent jump to 500,000 vehicles.

Beijing Hyundai's sales slumped to 231,137 in 2007, its lowest tally in three years. Hyundai, South Korea's biggest carmaker, and Beijing Automotive Industry Holding Co each have a 50 percent stake in the venture. It sells five models, including the Accent compact, the Elantra sedan and EF Sonata sedan.

To help boost sales, Beijing Hyundai will also spend about 50 percent more on advertising and increase its number of dealerships by about 25 percent to 420 this year by adding new outlets in smaller cities.

"Our dealers have been mainly in big cities and we will make our cars available in more places in China," said Noh.

Sales jumped 24 percent to a record 30,063 in January, led by demand for the Elantra, the country's third-bestselling car in the period. Elantra sales climbed after the company cut prices on models by an average of about 9 percent in September.

Beijing Hyundai's second plant will have an initial capacity of 200,000 units and will be expanded to 300,000 units by 2010 to double the venture's total capacity to 600,000 units a year, according to Noh.

Beijing Automotive is in talks with Hyundai about exporting cars made at the venture to eastern Europe and other countries, said Noh. "Our partner Beijing Automotive hopes to start exporting as soon as possible," said Noh.


(For more biz stories, please visit Industry Updates)



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