Beijing Hyundai “D+S” Strategy Prominent, Korean Auto Overweight High-end Cars

No doubt that Korean auto is a winner of Chinese auto market this year. According to China Association of Automobile Manufacturers statistics, Korean car has sold 1.29 million accumulated from Jan to Oct this year, which has increased 21.96%.

On 19 Nov, Beijing Hyundai MISTRA has launched market. Beijing Hyundai takes Mistra well serious, which hope it can overweight its high-end product percentage taking among its product line.

To increase its high-end products percentage taking among sales, Beijing Hyundai has initialed “D S” strategy as early as 2011. It means that intermediateand high ends and SUV strategy. With development of the strategy, intermediate and SUV products take more and more sales percentage, which is expected to up to 40% this year.

“Next year, Sonata 8th and Mistra production capacity will increase to 200 thousand.” Zhifeng LIU, vice executive general manager of Beijing Hyundai Co. Ltd, told reporter of during interview that it means D and S modules of Beijing Hyundai will increase in the next year again.

“In 2015, Beijing Hyundai sales will reach around 1.5 million, and D and S module will take 50%.” Haozhi XUE, brand reputation director of Beijing Hyundai said.

Dongfeng Yueda KIA is another joint venture of Korean auto company. Its intermediate vehicle and SUV sales grow fast as well. According to the first 10 months of this year, its K5, Sportage and Qiysl grow faster than segment average.

With the development of Beijing Hyundai and Dongfeng Yueda KIA take effort on intermediate segment, Japanese auto has to face its Korean opponents now.

Dongfeng Yueda KIA, as a Korean joint venture, has a similar Chinese market performance history with Beijing Hyundai. Maxima is welcomed by market, and Dongfeng Yueda KIA, which has found only for 1 year, built its reputation rapidly. However, Optima have not aroused market. It was taken as an example for KIA intermediate feeble.

Because of intermediate market forwards delay, Beijing Hyundai and Dongfeng Yueda KIA are unable to promote their products into intermediate mainstream. The segment is monopolized by Japanese, Germany and American.

According to statistics from Gasgoo.com, Germany, American and Japanese have taken 18%, 19.7% and 46.7% market share respectively in 2010. Compared with them, Korean only takes 4.6%. Meanwhile, Chinese owned brands take another 8.6%.

With Sonata 8th and K5 launched market in 2011, the situation has changed. Korean car market share increases to 9.5%, but American and Japanese intermediate car market share dropped.

The situation remains. Korean intermediate car has sold 16.3 thousand, which has increased 12.8%. according to statistics, Japanese, Germany, American and Chinese brands intermediate cars have sold 57 thousand, 43 thousand, 32.9 thousand and 7.2 thousand respectively, which has increased 52.5%, -8.3%, 1.1% and -6.9%.