AutoBeta(AutoBeta.net)11/18 Report--

The Hyundai Group recently reported third-quarter results from Beijing Hyundai, which posted a revenue of 2.76 trillion won and an operating loss of 125.3 billion won (about 750 million yuan) due to weak car sales.

From January to October this year, Beijing Hyundai sold 568300 vehicles, down 4.2% from a year earlier, according to the Federation of passengers. Compared with last year, Beijing Hyundai still failed to reverse the year-on-year decline. Compared with the previous nine months, cumulative sales of 451400 vehicles, down 19.6% from the same period last year, the decline has narrowed.

Beijing Hyundai has been hit hard since 2017. Sales for the whole year were only 785000 vehicles, down 31% from the same period last year, and only 62.8% of the 1.25 million sales target. Sales in 2018 are still not good, with a cumulative sales of 766000 vehicles, with less than two months left in 2019, based on 56000 vehicles sold in October, meaning Beijing Hyundai will hit a new low this year.

Obviously, there have been voices saying that Korean cars are getting warmer. However, from the objective sales data, compared with the same period last year, Beijing Hyundai still failed to reverse the decline in sales.

In fact, the main reason for the current sluggish sales of Beijing Hyundai in China is still the weakness of its products, its failure to keep up with the changes in the demand of Chinese consumers, and the unclear positioning of its models.

Tusheng has been recalled repeatedly for a variety of reasons since 2016, with a total of 400377 vehicles recalled again in August this year. In addition, there are many quality problems learned from the car quality network platform, such as the high noise of the modern Festa engine, the inability to start the pleasant engine, the stagnation of steering and rust of the car body, the rust of the ix35 body, etc., or become a common problem.

The speed of product upgrading is slow. For example, Tusheng, which was listed in 2005, had a replacement in 2015 with sales of more than 170000 vehicles, which should have led to a generational period, but there was no change until the fourth-generation Tusheng went public at the end of 2018. In addition, Beijing Hyundai has been in the situation of Elantra, Yueyu, Lang Zong and leading the "four generations living in the same house" for a long time, but there is not much difference between these four generations.

According to Beijing Hyundai's five domestic factories, the total annual production capacity is about 1.65 million vehicles. Today, sales of less than 800000 vehicles are equivalent to more than 50 per cent of spare capacity, and Beijing Hyundai is in a state of serious overcapacity according to the industry's recognized algorithm for healthy operation of at least 80 per cent capacity utilization.

In order to revive sales, Hyundai is seeking a "price for volume" strategy and increasing the introduction and replacement of models in China, but in fact, with the overall depressed environment of the auto market, as well as the rise of some independent brands, Korean cars as joint venture brands have gradually lost their halo, and only its individual models still have a certain degree of attraction, but it can only be said that the performance is mediocre.

According to Hyundai Motor's third-quarter results, the company's revenue reached 26.97 trillion won, up 10.4% from a year earlier, with an operating profit of 378.5 billion won and a net profit of 460.5 billion won. Hyundai's net profit for the quarter was lower than expected, also due to falling sales in emerging markets such as China and India, which were offset by a recovery in US sales.

Obviously, there are still many problems with Korean cars in China. For this reason, Hyundai has also made a "revival" plan and made a lot of efforts to return to the peak in 2021, but Rome was not built in a day, and the peak cannot be returned in a day. We can only wait and see how much time is left for it.

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