Hyundai reshuffles execs following sales slumps (China Daily)
A Kia car at the Nanjing Auto Show. The South Korean car brand saw its sales decrease by 33 percent during the first seven months in China. [Liu Jianhua / For China Daily]
Automaker tries to revive business after poor performance in China
Hyundai Kia Automotive Group announced a major reshuffle of senior executives last week.
The moves were seen as a rescue attempt for the automaker’s sluggish business in China after its sales performance continued to drop.
The reshuffle included appointments of new general managers of the joint ventures in China, with former executives hired as business consultants.
Lee Byung-ho was appointed general manager of Beijing Hyundai Motor, while Kim Gyun will be the general manager of Dongfeng Yueda Kia Motor.
Tan Tao-hung will be responsible for the strategies for the two Sino-South Korean joint ventures. The group said the joint ventures need to strengthen their skills in coping with the Chinese market.
Beijing Hyundai Motor’s Brand and Communications Director Hsueh Haochih said the new appointments were “normal changes”.
Beijing Hyundai Motor’s former general manager Kim Tae-yun will be the plant construction standing consultant, and Dongfeng Yueda Kia’s former general manager So Nam-young will be the standing consultant.
The two brands have suffered sales slumps in the Chinese market. Hyundai’s sales dropped by 32.4 percent to 54,160 vehicles, and its accumulative sales declined 10.8 percent in the first seven months to 564,451 units.
Kia’s sales dropped by 33 percent during the same period.
Joining the SUV boom
Hyundai told Bloomberg it plans to take measures to boost its sales in China.
Hyundai is playing catch-up after missing out on a worldwide sport utility vehicle boom sparked in part by a decline in gasoline prices.
None of the automaker’s vehicles ranked among the 10 best-selling SUVs in the first quarter in China, its biggest market.
In April, Hyundai showed a version of its revamped Tucson SUV at the Shanghai Auto Show.
In June, the company said it plans to sell 90,000 new Tucsons in the United States next year.
Hyundai will plans to introduce its new Creta SUV in India in the second half of this year.
To improve its sluggish business, Hyundai cut the prices of two of its SUVs by 11.8 percent early this year.
Kia slashed the prices of two of its new SUVs by 30 percent.
To further offset its sales losses, last month Kia Motors said it would offer more SUV models and boost incentive spending in China to try and revive flagging sales in its biggest market.
The carmaker plans to add two new SUV models to its lineup in China by 2017, doubling its offerings in the fast-growing vehicle segment, Chief Financial Officer Han Chun-soo said.
The Seoul-based company will also add new dealers to increase sales in western China, he said.
Last month, Hyundai and Kia’s chairman, Chung Mong-koo, said Greece’s potential exit from the euro, falling interest rates in the US and stagnant economic growth in China affected the global economy and business environment.
Emerging economies are also likely to suffer, with the yen and euro weakening even further, he said.
“Within the current market situation, we must focus on boosting our sales capabilities,” said Chung. “Each company needs to operate cohesively to form an effective company wide sales support system that will prepare us for the future.”
The Korea Automotive Research Institute, part of the group, cut its forecast on the global auto industry’s growth rate for this year to 1.2 percent from the earlier 2.6 percent.
Bloomberg contributed to this story.