Kia Beats Hyundai In Korean Sales For First Time

[StingerMike]

Kia has managed to maintain its lead, outselling Hyundai 104,954 to 101,644 in the first three months.

Some startling, plate-shifting news recently emerged from the South Korean auto market: In 2016, for the first time in history, Kia outsold Hyundai.

For auto industry watchers, this is huge news, and another troubling sign for Hyundai, which can't seem to catch a break recently. For others, let me put it in perspective: This is like Coors Light outselling Bud Light. Like finding out there's another peak higher than Mount Everest. Like Avis suddenly becoming Number One.

In 2016, Kia sold 475,107 passenger vehicles, while Hyundai sold 418,303. These figures do not include commercial or military sales, where Hyundai still leads. But commercial and military vehicle sales are not emotional, discretionary choices. They are pragmatic purchases of need. The passenger vehicle sales, however, show that Kia is beating Hyundai in the crucial battle of consumer hearts and minds. And it's not just that Korean consumers are buying more Kias; they're running away from Hyundai. Sales of Hyundai passenger cars in South Korea dropped 21 percent from 2015 to 2016.

So far in 2017, Kia has managed to maintain its lead, outselling Hyundai 104,954 to 101,644 in the first three months.

It is true that Hyundai and Kia are both part of Hyundai Motor Group, South Korea's second-largest chaebol, or family-owned conglomerate. Atop Hyundai Motor Group sits one man and one man only - Chairman Chung Mong-koo, son of Hyundai founder Chung Ju-yung. All major decisions about Hyundai and Kia - down to his surprise Saturday morning visits to design studios, where one harsh comment can cause an entire re-do - flow from Chairman Chung. And all revenue from every Hyundai and Kia flows back into the same family-controlled set of companies.

However, even though Hyundai and Kia vehicles share platforms, engines, R&D and some production facilities, sales, marketing, messaging and product design all are separate - often to a stark and surprising decree. The first time that I and many of my Hyundai colleagues knew that Kia was building a luxury car was when we saw the new Kia K9 (K900 in the U.S.) sitting on a pedestal in the lobby of Hyundai Motor Group headquarters in Seoul. Hyundai and Kia compete as brands and within vehicle segments for revenue and market share, in Korea and globally. The competition is relentless, and careers are made and lost over it.

And up until now, Hyundai has always been No. 1 in Korea. That matters a lot. The Chung family founded Hyundai. They bought Kia out of bankruptcy, in the wake of the 1997 Asia monetary crisis. Even though Kia is older than Hyundai, having started life as a bicycle maker in 1944, it has always been seen as Hyundai's ?little brother,? saved by Hyundai.

 

[ATXStinger]

This could also be due to Hyundai moving a few models over to it's Genesis brand.

 

[Euljiro1ga]

I live in Korea, and after reading a bit about the car market in Korea a bit while researching the stinger, this news came as no surprise.

Hyundai cars are always priced a bit higher than the Kia counterpart. The G70 is about $2,500 more expensive than the stinger, even though they share the same platform, engine, etc. Hyundai seems to believe that the general consumers still perceive Hyundai to offer superior quality than Kia. In the current reality, they are essentially the same. One weird thing I learned talking to car dealers is that Koreans chooses the car model based on their age to a certain extent. This one time I asked a dealer about the Kia K7 (Cadenza in the US) comparing to the stinger, the guy suggested that I wouldn't be interested in the K7 because it's for people in their 40s (I'm in my early 30s). That said Kia's designs are generally 'younger' than those from Hyundai, so Hyundai seems to think they can charge more because their cars are more 'mature' looking than Kias. From my observation, I think that's a wrong move. People actually like the 'younger' design of Kia's more than the 'mature' but 'boring' Hyundais, plus Kias are priced lower.

Kia buyers also get the same 'benefits' as Hyundai buyers here in Korea. For example, buyers still get some cash backs when using Hyundai credit cards (yes, there are Hyundai credit cards in Korea along with hospitals, shopping malls, and many more). There's very little differentiation between the two brands now.

I wonder how are things in the US between the two brands.

 

[SeoulStinger]

Its the same here in the US in terms of brand hierarchy. Kias are for the most part priced below Hyundais.