Hyundai plans low cost SUVs to save its Chinese market share

Hyundai plans low cost SUVs to save its Chinese market share
Highlights

Hyundai is the third largest automaker in China after VW and GM.Hyundai and Kia have been catering to the price sensitive segments of the vast Chinese market by repositioning their old generation models to co-exist with latest iterations. However, the emergence of strong and modern low-cost products from local manufacturers like Great Wall has made Hyundai’s strategy redundant. Reuters reports tha

Hyundai is the third largest automaker in China after VW and GM.Hyundai and Kia have been catering to the price sensitive segments of the vast Chinese market by repositioning their old generation models to co-exist with latest iterations. However, the emergence of strong and modern low-cost products from local manufacturers like Great Wall has made Hyundai’s strategy redundant. Reuters reports that the South Korean automaker is working on a slew of low cost SUVs in a bid to keep its Chinese market share from getting eroded.

The publication’s sources say that Hyundai and Kia will use local engineering capabilities (the brands’ have a joint R&D centre at Yantai), employ local suppliers and tone down the specifications of the components to arrive at price tags which would beat the native Chinese brands.

Hyundai is reported to start production of its first low cost Chinese SUV at its Changzhou plant by November 2017. A sub-compact SUV is scheduled to enter production at Chongqing plant in 2018. The Kia counterparts of these SUVs in question will also follow suit.

The low cost SUVs planned for China are not likely to be launched elsewhere but we expect these models to share modules with Hyundai-Kia’s global models. Hyundai Group is the third largest automaker in China after VW and GM but last year, the market share slid to 8.9% which is a 7-year low.

This article has first appeared in Rushlane.com

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