Why Hyundai is skipping auto shows in Europe in favor of SE Asia

Posted on : 2023-08-28 17:27 KST Modified on : 2023-08-28 17:27 KST
SE Asia and India have proved enticing markets for Korean automakers
Hyundai Motors Indonesia unveiled its newest model of their Ioniq lineup, the Ioniq 6, at the 2023 Gaikindo Indonesia International Auto Show on Aug. 14. (courtesy of Hyundai Motors Indonesia)
Hyundai Motors Indonesia unveiled its newest model of their Ioniq lineup, the Ioniq 6, at the 2023 Gaikindo Indonesia International Auto Show on Aug. 14. (courtesy of Hyundai Motors Indonesia)

After recently opting to attend a motor show in Indonesia, Hyundai and Kia plan to sit out upcoming premier world events in Germany and North America.

Analysts said the automakers appear to be stepping up their push into Southeast Asian markets following Hyundai’s recent decision to acquire a General Motors plant in Talegaon, India.

Hyundai and Kia have decided not to attend the IAA Mobility motor show in Munich, which starts on Sept. 5. They also reportedly plan to sit out the North American International Detroit Auto Show, which kicks off on Sept. 13.

Among Hyundai Motor Group affiliates, only Hyundai Mobis is scheduled to attend the motor show in Germany.

The popularity of motor shows as venues for showing off new models and technology has waned compared with past years.

Recently, there has been a “crossover” trend where the makers of finished automobiles appear before client companies at appliance shows, while the makers of automobile electrics appear at motor shows. Indeed, both Samsung Electronics and LG Electronics are attending the motor show in Germany.

Another shift has been the adoption of a more strategic approach of choosing which events to attend based on company interests rather than simply showing up at all the most renowned events.

Indeed, while the Hyundai Motor Group is not attending the shows in the US or Germany, it did attend a motor show that opened in Indonesia on July 10 — a move that could be seen as a strategic step targeting the Southeast Asian market.

“The climate right now isn’t one that supports attending every single motor show,” an industry insider said, adding that Hyundai Motor’s presence at the Indonesian motor show “should be seen as signifying strategic participation in a motor show based on market potential, since Indonesia is a leading ASEAN country.”

ASEAN member countries like Indonesia and Thailand have been emerging as new automobile market bases. In the first half of 2023, sales for the Hyundai Motor Manufacturing Indonesia plant amounted to 17,332 vehicles domestically and another 30,114 for export.

According to the Association of Indonesian Automotive Industries, Hyundai Motor’s share of the Indonesian market in terms of sales during the first half of the year was up by 1.6 percentage points from the same period in 2022, rising from 2% to 3.6%.

The Hyundai Stargazer, a six- to seven-seater compact multi-purpose vehicle launched in summer 2022 to target the Southeast Asian market, has ranked in the top 10 for sales in Indonesia.

Hyundai Motor has also been exploring the possibility of future production in Thailand, where it established a sales branch in March 2023.

The automaker is also making active strides at breaking into the Indian market, a steppingstone for moving into Europe and home to the world’s largest consumer market thanks to its massive population.

The recent acquisition of GM’s plant in Talegaon in addition to Hyundai’s factory in Chennai and Kia’s production line in Anantapur put the automakers on their way to reaching their goal of producing 1.5 million cars locally each year. Hyundai and Kia plan to invest 3 trillion won over the course of 10 years in India on the projection that they can take an early lead in the local electric vehicle market there and use it as a strategic hub for exports.

At the same time, two automakers are taking concrete steps toward withdrawal from China, where sales have been lagging.

Hyundai put up its plant in China’s Chongqing up on the market for 3.68 billion yuan (US$505 million). After selling its Beijing No. 1 plant in 2021, Hyundai was reportedly planning on selling its factories in Chongqing and Changzhou. If this comes to fruition, the automaker will be left with only two production bases in China, both in Beijing, with a combined output of 750,000 units per year.

With shrinking demand in China, Hyundai and Kia are proceeding with sales of their group affiliates Hyundai Steel Beijing Process and Hyundai Steel Chongqing.

“As for Hyundai, sales in China and India have largely reversed since 2018 [during controversy over THAAD],” commented Yim Eun-yeong and Kang Hee-jin, two analysts at Samsung Securities.

Hyundai and Kia’s entry into the Indian market is “likely to increase opportunities for SL Corp, Hwashin, Sungwoo Hitech and other companies making battery-related products to win contracts in the Indian market,” the analysts said.

By Choi Woo-ri, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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