The European success of South Korean car brands
The specter of Asian competition has regularly plagued the European automotive industry. Today, Japanese firms are experiencing mixed fortunes, and the ambitions of Chinese brands – whose sales are still in their infancy – are a scarecrow. However, if we look at the reality of the market, South Korean manufacturers seem to be the strongest contenders.
In the last two years, marked by the consequences of the Covid-19 pandemic and the difficulties in supplying semiconductors, the market shares of Hyundai and Kia, the two brands of the conglomerate Hyundai Motor Group, have skyrocketed at the end of July a quarterly result of 2 billion euros, up 59%. While car sales in the European Union fell by 14% in the first half of the year, only those of the Korean duo are developing positively. The two brands, which are tied, represent 9.6% of the total European registrations, an increase of three points compared to 2019. Over the same period, Hyundai went from 1.8% to 3.1% of the French market and Kia from 2 % to 2% 3%.
This forward march is not new, but it has accelerated. The group, with half of its sales in Europe coming from its factories in the Czech Republic and Turkey, remains highly integrated and closely linked to its network of Korean suppliers. This allowed it, at least initially, not to face as severe production restrictions as most of its competitors. Hyundai Motor Group’s factories returned to overtime in the second quarter, the company said. “At the same time, we have prioritized supplying the European market, which we know to be the most profitable,” says Lionel French Keogh, President of Hyundai France.
The progress of the two brands is also due to their ability to feed into market developments, in particular the accelerated march towards electrification, thanks to which they have gained technological credibility. Just to offer (with Porche) an architecture in 800 volts, some of the latest electric Hyundai and Kia can accumulate the equivalent of 130 kilometers of autonomy in just seven minutes on a powerful highway terminal. “51% of our sales are hybrid or all-electric and this commitment is not new,” stresses Marc Hedrich, President of Kia France, who recalls that the introduction of electro-soul dates back to 2014.
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