Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. saw their combined sales in China plunge in June amid intensifying competition and a lack of new models, industry data showed Friday.
Hyundai Motor, South Korea's largest carmaker, sold around 60,000 cars in China last month, down 30.8 percent from a year earlier. Kia Motors saw its China sales in June drop 26.5 percent on-year to some 38,000 units, according to the data.
This comes in stark contrast with others, including Japanese rivals and homegrown car manufacturers which gained ground last month.
The data showed that Japanese carmakers Toyota and Honda posted 41.7 percent and 26.1 percent sales growth in June. Mercedes-Benz saw its June sales in China expand 38.5 percent, while homegrown carmaker Great Wall Motors also fared better with 4.7 percent growth.
The two Korean carmakers' lackluster sales performance is expected to have lowered their combined market share in China to below 8 percent. Their market share based on January-May sales was 9.5 percent.
China's slowing economic growth and stepped-up competition from other rivals armed with deep price cuts and aggressive marketing drive are cited as reasons for the disappointing June numbers for Hyundai Motor and Kia Motors.
Aging models with a lack of brand-new vehicles hitting the market might also be playing a role, experts said.
The recent sales figures in China underline the challenges that the two Korean carmaking giants are currently facing in global markets. Setbacks in emerging markets, in particular, hit them hard, leading their first-half overseas sales to drop 3.2 percent from a year earlier.
Against this backdrop, Chung Mong-koo, chairman of Hyundai Motor Group, which holds the two carmakers under its wing, plans to convene a meeting with dozens of overseas unit heads next week to discuss the latest global market situation and sales strategies.
"This is the first such a meeting to be held this year. They are expected to discuss how to expand sales in the second half, how to respond to the weak yen and slumping emerging market demand," a group official said.