Korean Hyundai and Kia duo threatens Japanese presence in SE Asian market

Hyundai Motor’s Accent

Hyundai Motor Co. and its sibling Kia Corp. have made fast strides in Southeast Asian market to threaten long-held dominance of Japanese brands.

According to the Vietnam Automobile Manufacturers’ Association on Thursday, Hyundai Motor and Kia sold a combined 47,860 vehicles as of May this year in Vietnam, nearly doubling sales of Japan’s Toyota of 24,112 units.

Hyundai Motor sold the largest 24,420 units in the Vietnamese market, and Kia third-largest 23,440 units.

Hyundai Motor became the top seller in the Vietnamese auto market for the first time last year in terms of annual sale. Having stayed at the top in monthly sales for the last two months, there is a growing chance the Korean car brand may beat Toyota again this year.

Hyundai Motor’s Vietnamese factory rolls out Grand i10, Accent, Avante, Kona, Tucson, Santa Fe and Porter.

Vietnam is the fourth largest automobile market in Southeast Asia after Thailand, Indonesia and Malaysia, fast growing to annual sales of 33,400 units last year.

India has become another lucrative market for Hyundai and Kia.

Their combined auto sales totaled 36,501 units in May in India, the biggest and defeating Japan’s Maruti Suzuki (32,903 units) for the first time since its foray into the market.

From January to May, Hyundai Motor sold 230,208 units in India, the second largest after Maruti Suzuki who sold 598,748 units. Kia sold the fourth largest 82,019 units.

Although the Japanese name still is ahead in annual sales, the two Korean brands are catching up fast with SUV fleet.

Their factory output is expected to normalize amid easing in Covid-19 spread in India. Hyundai Motor’s Chennai factory has decided to return to a three-shift cycle from this week from two-shift.

Hyundai Motor’s Chennai factory

Hyundai Motor Group has been doubling down on its expedition in Southeast Asia upon losing the Chinese market to local players.

Hyundai Motor set up a production joint venture Hyundai Thanh Cong Viet Nam with Vietnam’s Thanh Cong Group in March 2017. It then ramped up the Vietnamese factory output and built a local sales joint venture to have an annual production and sales capacity of 100,000 units in 2019.

In Indonesia, Hyundai Motor is building a factory in Bekasi, east of Jakarta with an aim to start producing 150,000 units per year starting the end of this year and then expand the volume to maximum 250,000 units.

The market also has huge growth potential in EVs.

Hyundai Motor, which signed a strategic partnership with Grab with $275 million investment in 2018, recently vowed strengthened ties with the Singapore-based ride-hailing, delivery and financial service platform operator to offer more EVs to local drivers.

Its goal is to make EVs more accessible in the market by launching its Battery-as-a-Service business and financial support program first in Singapore this year and then in Indonesia and Vietnam.

A battery joint-venture factory with an annual capacity of 10 gigawatt-hours (GWh) also is under construction in Indonesia with 1.3 trillion won investment by Hyundai Motor and LG Energy Solution.

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