Hyundai-Kia Group still has a high degree of concern about the Chinese market, and will not be willing to let Yueda Kia be a dispensable marginal joint venture brand, and its rapid layout in the field of new energy has shown its ambitions.
According to Korean media reports, Hyundai Motor and Kia's combined operating profit is expected to reach 27 trillion won (about 1,449.) due to strong sales of high value-added models such as motorhomes and new energy vehicles900 million RMB), the highest performance in history. According to Hyundai Motor's financial report released on January 25, the company's total operating profit in 2023 will reach 151,269 trillion won (about 81.1 billion yuan), a record high.
Last year, Hyundai-Kia Group still achieved sales of 7.3 million units, of which Hyundai sold 4.22 million units and Kia sold 3.08 million units, ranking third in the world in terms of total sales. While Hyundai Kia is making great progress in the world, the operating performance of Yueda Kia, one of the joint ventures in China, does not seem to be optimistic.
On January 12, Yueda Kia's official *** released data claiming that in 2023, Yueda Kia will sell a total of 166,395 vehicles at home and abroad, of which 80,602 vehicles will be exported and sold. In fact, Yueda Kia's domestic sales were only 85,713 units.
You must know that in 2016, Kia Automobile's sales in China peaked close to 650,000 units. However, since 2017, sales have been declining year by year, and the presence in the joint venture brand market is also declining.
In 2017, sales were only 35950,000 units, a decrease of nearly 300,000 units. In the four years from 2018 to 2021, the decline in sales has become more and more obvious, with 370,000 units and 28980,000 units, 24930,000 and 16340,000 units. By 2022, the precipitous Yueda Kia will only sell 940,000 units.
From 650,000 units in 2016 to 850,000 units, sales in seven years have shrunk by more than seven times.
The sharp decline in sales has also been under heavy pressure from the management side. According to reports, Yueda Kia's asset-liability ratio has reached 119% at the end of 2022, which is 9 percentage points higher than the asset-liability ratio of GAC FCA, which has previously declared bankruptcy, and has become the largest "non-performing asset" of Hyundai-Kia Group.
According to the latest financial report released by South Korea's Kia Corporation, as of the end of the third quarter of 2023, the total liabilities of Jiangsu Yueda Kia Automobile, a joint venture company in China, have reached 266 trillion won (about 142.)RMB 84.2 billion), with total assets of 193 trillion won (about 103.)64.1 billion RMB). According to this calculation, Yueda Kia is insolvent and has an asset-liability ratio of 1379%。
In the face of such a poor situation, the outside world has rumored that Kia Motors will withdraw from the Chinese market, and then Kia China's chief operating officer Yang Honghai has publicly responded, "It is impossible for Kia to withdraw from the Chinese market!" ”
Kia Motors, which officially entered the Chinese market in 2002, has repeatedly stated that it will not withdraw from the Chinese market, but it is an indisputable fact that its sales are declining year by year. However, Yueda Kia is not without action, in order to reverse the disadvantage, Kia has to turn its attention to the global market, the Chinese market production of models overseas, the export of an important breakthrough in the development of China, the formation of domestic sales and export sales "equal" trend, in order to achieve high year-on-year growth.
In August 2022, Yueda Kia proposed to build its plant in Yancheng, Jiangsu Province, into Kia's global export base, with the plan at the time to expand exports to more than 100,000 units by 2026, and to raise this target to more than 200,000 units a year later.
In recent years, due to the rapid rise of independent brands and new energy technologies, some joint venture brands have gradually lost their former "glory" in the competition, their market share has been compressed, and their survival has become increasingly difficult. As a last resort, exports have become a new turning point for them to seek change and breakthroughs, not only Yueda Kia, but also joint venture brands such as Changan Ford and Dongfeng Citroen.
Not only should we strive for a breakthrough in "export sales", but also in terms of electrification transformation, Yueda Kia is also unambiguous. In March 2023, Yueda Kia announced its new energy strategy in China. According to the plan, Yueda Kia will launch at least one pure electric vehicle based on the e-GMP platform every year, and by 2027, a total of 6 pure electric models will be launched, and strive to achieve the goal of 180,000 pure electric vehicles by 2030, accounting for 40% of sales.
Needless to say, Korean cars still have a certain market base in the Chinese market, and although their market share has shrunk significantly compared to before, the increase in export sales has saved the production and sales of Beijing Hyundai and Yueda Kia in China.
Emaciated camels are bigger than horses. As the world's third largest automaker, Hyundai-Kia Group has been deeply involved in China for many years and has established a wide market reputation, even if it has not obtained a comparable market position for the time being, but the original intention of being optimistic about the prospects of the Chinese market and effectively deploying it will not change, even if the joint venture in China encounters the current sales bottleneck, it will not give up easily. Even if Fiat, Suzuki, Renault, DS, Opel, Seat, Acura, Jeep, Mitsubishi and other companies withdraw or stop production, it does not mean that Yueda Kia's joint ventures in China will also retreat and fade away.
In Lin Yan's view, Hyundai-Kia Group still has a high degree of attention to the Chinese market, and will not be willing to let Yueda Kia be a dispensable marginal joint venture brand, and its rapid layout in the field of new energy has shown its ambitions.
In 2023, the Kia EV6 was announced at the Chengdu Motor Show, and the whole vehicle will be imported and sold, and according to the needs and preferences of Chinese consumers, only the more sporty and powerful GT-line version and the high-performance GT version will be introduced, with an official suggested retail price of 28Starting at 280,000 yuan, the price is more sincere than that in overseas markets. Kia's first strategic model EV5, developed by China, produced in China and sold globally, was officially launched at the Guangzhou Auto Show in November last year, with an official suggested retail price of 14From 980,000 yuan. Also in the fuel vehicle market, Kia will introduce products such as K3 and Setus to the Chinese market in 2023, and together with K5, Jiahua, Shibo Tuojie, etc., it will form a richer lineup of fuel vehicle products.
In 2024, Kia will bring its flagship SUV model, the EV9. In 2025-2027, Kia will also launch an entry-level electric SUV, a high-end electric sedan, and a midsize electric SUV.
Lin Yan believes that the new development pattern of "domestic sales and export sales go hand in hand" built by Yueda Kia is indeed conducive to the construction of export bases and the expansion of sales, but it still has to work hard and continue to expand in terms of domestic sales, especially in the company's turnaround.