Hyundai Motor Group plans to make inroads into the Chinese luxury car market with its Genesis brand “in the near future,” an industry source told Asia Times on Monday.
Monthly passenger car sales in China, the world’s largest automobile market, have fallen since June 2018. They sank 6.3% in September to 1,931,000 units from a year earlier, according to China Association of Automobile Manufacturer’s data.
During the January to September period, China’s car sales dropped 11.7% at 15.2 million as demand suffered from jitters over the US-China trade dispute and economic slowdown. Sales of SUVs, which sell well around the globe, dropped 9.3% year on year for the first nine months of this year.
Hyundai and its sister company Kia Motors also experienced a drop in sales volume in China. Through September, Hyundai sold 451,000 units in China, a 19.6% fall from the same period last year. Kia’s sales fell 17.3% year on year during the same period.
However, sales of premium brands such as BMW, Mercedes-Benz, Audi, and Lexus, have risen in a steeply declining market.
According to media reports, for example, Toyota’s luxury brand sold 144,590 units in the first nine months, up 22.8% from the same period last year. Mercedes Benz sold 533,241 units during the January to September period, an 11% rise from a year.
An industry source told Asia Times, asked when Hyundai plans to launch the Genesis brand in China, said, “They will do it in the near future. There is some speculation on Hyundai’s plan to launch the Genesis brand in Europe next year. But, China will be the next destination for Genesis, and we don’t know when they will go to Europe. ”
An industry analyst told Asia Times that assessing the competitiveness of Genesis in the Chinese market would be difficult at this point as it would be the first try. But, he said, “the sooner, the better.”
“Demand in the luxury segment in China is increasing, so launching Genesis there is expected to help improve Hyundai’s earnings,” said Lee Han-joon, an auto analyst at KTB Investment and Securities. “Selling Genesis in China is not a bad choice at all.”
He contrasted the sales performance of General Motors against Ford in China, saying, “GM sells premium Cadilac cars in China, and their performance in China is better than Ford, which doesn’t sell premium Lincoln brand cars in China.”
GM’s Chinese car sales dropped 17.5% on year in the third quarter this year, but sales of premium Cadillac brand rose 10.9%, according to the data from GM China, compensating for the sluggish overall sales.
Hyundai plans to strengthen the lineup of Genesis with two new luxury SUVs along with expanding the geographic reach. Currently, the Genesis brand is sold in South Korea, Canada, the Middle East, Russia, and the US.
The Genesis has been struggling in competition with rivals in the US market as it lacks an SUV. Now the Genesis portfolio consists of only three sedans: the G70, G80, and G90.
Later this year, Hyundai plans to release its first luxury SUV, the Genesis GV80. The model is designed to compete with the Mercedes Benz GLE, BMW X5, Audi Q7, Volvo XC90, and Lexus RX350.
It will share its rear-wheel-drive platform with the all-new G80 mid-size premium sedan, which will be rolled out next year.
Genesis will launch another SUV model GV70, an SUV version of G70 sedan, late next year at the earliest. It will take on competitors such as Mercedes Benz GLC, BMW X3, Audi Q5, Volvo XC60, and Lexus NX300.
Genesis also plans to make inroads in Europe following China. But, German brands’ dominant position and the jittery market condition caused by trade disputes and Brexit will be odds for Hyundai to make the decision.