(Written by Zhang Jiadong and edited by Zhang Guangkai).
According to foreign media reports, Hyundai Motor is planning to import the Sonata produced in China to the South Korean taxi market to meet the strong growth demand of local taxi drivers.
South Korea's largest automaker will import ** Sonata taxis from Beijing Hyundai for South Korean taxi drivers, according to South Korean auto industry sources, and the new car will be produced in a facelifted version based on the eighth-generation Sonata (DN8).
This decision is unprecedented for the Korean auto industry, which has long relied on domestically produced models to fill the market.
Taxi in Sonata (LF).
In August this year, Hyundai Motor issued a statement in China that its plant in Asan City, Chungcheongnam Province, South Korea, would stop producing the last taxi product based on the seventh-generation (LF) Sonata model due to difficulties in sourcing parts.
The seventh-generation Sonata was officially launched in 2014, and since then, Hyundai has created a liquefied petroleum gas (LPG) Sonata model specifically for its rental market.
Hyundai has said that another reason for discontinuing the production of the taxi is that due to the rapid development of electrification, Korean car companies are always looking for more purely electric taxi products to replace LPG models.
But South Korean taxi drivers have not paid for the decision since the shutdown of Sonata taxis this year, with a large number complaining that they have no choice but to buy more expensive all-electric taxis such as the Ioniq 5 or Niro PBV because of the lack of LPG-powered midsize sedan taxis in South Korea.
Hyundai's decision to introduce models from its Chinese plant is a decision made by Hyundai Motor to ensure the stability of the Korean taxi industry.
On the other hand, the use of Chinese factories to produce Sonata taxis will also help to increase the utilization rate of its factories in China.
As the first joint venture to be established after China's accession to the World Trade Organization (WTO), Beijing Hyundai achieved the "modern speed" of "signing contracts in the same year, building factories in the same year, and putting into production in the same year" in 2002.
Since then, Beijing Hyundai has achieved production and sales from 0 to 1 million units in just 63 months, making it the joint venture brand in the Chinese auto industry with the shortest time to achieve 1 million production and sales. Until the completion of the Chongqing plant in 2017, Beijing Hyundai had five factories with an annual production capacity of 1.65 million vehicles.
However, since 2018, due to the slow iteration speed of Korean automakers and the sluggish localization strategy, the peak of their sales in China is fleeting, coupled with the direct competition with the former after the rapid growth of Chinese automakers in recent years, the market share of Korean models in China has declined seriously in just a few years.
As of 2021, Beijing Hyundai's annual sales volume is only 360,000 units. Because a large amount of production capacity was idle, Beijing Hyundai sold its Beijing No. 1 plant to Li Auto in 2021In August this year, in response to declining sales in China, Hyundai Motor further strengthened its Chongqing plant.
In June this year, according to Hyundai CEO Jang Jae-hoon, in addition to the Chongqing plant, which has been confirmed, one of the other Beijing and Cangzhou factories will be closed and one will be sold. At that time, Beijing Hyundai will have only one factory left in China.
At the same time as the production capacity declines, Hyundai's product line in China will be reduced from 13 to 8 models, and the focus will be on SUVs and the luxury brand Genesis.
Hyundai has not yet announced which Beijing Hyundai plant it will use to manufacture Sonata taxis for this resale plan, but the decision is undoubtedly a win-win situation for Hyundai in terms of demand for the South Korean taxi market and increased utilization of its factories in China.
Domestically, however, Hyundai's plan has been opposed by Hyundai's South Korean labor union, which argues it violates a collective agreement with the union that prohibits the company from importing cars already produced in South Korea to protect the jobs of local employees.
The union said that the eighth-generation Sonata is still produced at the Asan plant in South Korea, so it believes that the Chinese-made taxi version of the Sonata should not be allowed into South Korea, but Hyundai said that importing Chinese-made Sonata taxis does not violate any regulations because South Korea no longer produces Sonata taxi models.
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