Boycott Linked to Hyundai-Kia March Crash in China

Hyundai and Kia are saying little about Chinese media reports and word from industry sources that the Korean automakersʼ combined March sales plummeted 52% amid a politically charged consumer boycott.

Official sales figures are to be released soon by the China Association of Automobile Manufacturers, while the automakers have withheld their regular monthly announcement of export sales.

“We do not have finalized sales numbers for March,“ a Hyundai Motor Group spokesman tells WardsAuto. ‟These numbers normally get finalized in the middle of the month and announced by (CAAM).

But, the spokesman adds, “We have seen a recent drop in showroom traffic in China as consumer sentiment towards Korean products overall is low and competitors are initiating special promotions targeting our customers.”

The unofficial March figures being circulated show a year-on-year drop of 52.2% in combined Hyundai-Kia sales, to 72,035 vehicles, with Hyundai down 44.3% to 56,026 units and Kia plunging 68% to just 16,006.

The automakers’ figures showing China sales in the first two months of the year, which match the official CAAM tallies, total 201,319 units, down 8%. But that preceded a consumer boycott of Korean products including not only automobiles but also cosmetics and electronics in China, which accounts for a little more than 25% of Hyundai Group’s global sales.

The boycott stems from the Chinese government’s denunciation of Korea’s deployment of a U.S.-produced missile-defense system. China complains the system’s radar can reach deeply into the country and snoop on its own aerospace and military flight activity.

One popular and influential Chinese website, Sohu Auto, tells consumers the best way to boycott Korean autos is by buying lower-priced Chinese homegrown brands. It notes six of the top 10 SUVs sold in China last year were locally built.

Local media reports say some Volkswagen dealerships are offering incentives to customers who buy a VW to replace a Korean-brand vehicle.

Some analysts link Hyundai Group’s March woes in China to the automaker’s relatively short SUV lineup.

According to CAAM, combined January-February sales of Chinese-brand cars increased 3.4% with 374,000 units sold. Chinese homegrown SUV deliveries jumped 28.3%, to 978,000 units.

Hyundai's joint venture in China, Beijing Hyundai Motor, is targeting 9.5% growth this year, from 1.14 million deliveries in 2016 to 1.25 million – March’s crash notwithstanding.