SEOUL, Oct. 19 (Korea Bizwire) – Hyundai Group affiliates Hyundai Motor Company and Kia Motors are rapidly expanding their Chinese operations, and their latest strategy is to target young consumers with green vehicles and SUVs.
The Chinese government has grown more sensitive to environmental concerns in recent years, and has set out various policies to boost the market for green vehicles.
China had 231,000 ‘green’ cars in 2015, an increase from 5,000 in 2010. The number is likely to almost double to 420,000 by the end of the year, and is expected to reach 1.7 million by 2020, according to HIS Markit. And although the number is still small relative to the population of 1.3 billion, the market has certainly proved its potential, with average annual growth of 110 percent from 2012 to 2015.
In the face of China’s rapidly growing market for green vehicles, Hyundai and Kia have been expanding their eco-friendly lineups.
Hyundai started manufacturing the Sonata Hybrid at its Beijing plant starting in May, whereas Kia also began local production of the K5 Hybrid in August. Hyundai plans to establish four eco-friendly platforms – hybrid, plug-in hybrid, EV, and FCEV – to launch nine new models by 2020, while Kia will also be strengthening its position as an eco-friendly automaker by expanding its lineup, including the K5 Plug-in Hybrid.
The SUV market is another sector that Hyundai and Kia are actively targeting.
According to company officials, SUVs have grown extremely popular in the Chinese market, accounting for 38.3 percent of total industry demand (as of August), with an increasing number of consumers preferring larger, more spacious vehicles over similarly-priced sedans.
Hyundai and Kia are currently selling nine SUV models in China, including Hyundai’s ix25 (Creta) compact SUV and Kia’s KX3, which make up 35.6 percent of the duo’s total sales in the country, an increase from 27 percent last year.
Meanwhile, Hyundai’s Chinese venture will target mainly the young, or the so-called “ba ling hou” (born in 80s) and “jiu ling hou” (90s) generations that have become China’s primary consumer group.
A connected car system is among Hyundai’s youth-targeting strategies.
Hyundai Motor, for instance, featured Apple’s CarPlay and Baidu’s CarLife for the first time in its Tucson SUV, and has since expanded the systems to other models including the Lingdong (Elantra) and Mingtu (Mistra).
“China’s automotive market is changing quickly, and it is summarized into three key elements: SUV, eco-friendly, and young consumers,” said a Hyundai Motor official.
By Kevin Lee (firstname.lastname@example.org)