Hyundai-Kia Deny Sales Boost Due to Japanese Woes in China

Hyundai and sister-brand Kia are denying news reports they benefited from a September sales boost in China after demonstrators in many cities smashed Japanese-brand vehicles and dealerships in support of a territorial dispute between China and Japan, sending sales of Japanese cars plummeting.

News reports say the sharp decline in deliveries suffered by Toyota, Honda, Nissan and Mazda were picked up by the two Korean auto makers, which consequently raised their sales targets.

Toyota reported its September sales in China tumbled 49%, Honda was down 40% and Mazda and Nissan both fell 35%.

Hyundai spokesman Frank Ahrens in Korea says Beijing Hyundai is not benefitting from Japanese competitors’ woes in China.

The joint venture “has not changed its original 2012 sales target of 790,000 units, but expects to exceed the target in light of the Chinese auto market’s continued growth,” he tells WardsAuto.

“Before the third plant went into operation, our production capacity stood at 600,000 units (on a regular shift basis).

“To meet strong demand, our (Chinese) plants produced over 700,000 units from 2010 through operating additional hours daily as well as on weekends. Currently, even with a third plant, all plants are still operating more than regular hours.”

Ahrens says while the Yuedong (Elantra) is Beijing Hyundai’s top-seller, the Langdong (long- wheelbase Elantra) that launched in August is expected to be a powerful performer. The Langdong sold 11,613 units in August and 15,243 units in September.

Beijing Hyundai delivered 84,188 vehicles in September, marking a 12% rise from July and up14.9% year-to-date.

Kia spokesman Michael Choo says the Dongfeng Yueda Kia JV also has not benefited from the problems faced by Japanese auto makers in China.

“As with all of our strategically important markets, we are keeping a close eye on the competitive environment in the Chinese market, but have yet to see any direct benefit (from the China-Japan turmoil),” Choo tells WardsAuto.

Kia’s 43,639 sales in China last month were nearly flat compared with year-ago’s 43,508 units, he says. However deliveries in the first nine months climbed 11% to 333,456 units, compared with 300,674 in like-2011.

Kia’s annual sales target for locally produced vehicles in China remains at 460,000 units and has not been increased, Choo says. The K2 (Rio) is the auto maker’s top-selling model, with 104,000 deliveries through the first nine months. Sales of the Forte, Sportage and K5 (Optima) are ahead of year-ago.

The Chinese JV’s two plants have been operating flat out, with overtime on weekends, he adds. Ground was broken for a third plant in July, which is expected to be completed in second-half 2014.

The demonstrations in China against Japanese auto makers are in support of a territorial dispute with Japan, which claims sovereignty over a group of uninhabited islands in the East China Sea that China says has been part of its territory for centuries. China calls the islands Diaoyu and Japan refers to them as Senkaku.