Is Hyundai Motor’s ‘one-top’ EV market okay?


The three mid-tier automakers have limited capacity to respond to electric vehicles… Declining share of internal combustion engines

Hyundai Motor Company and Kia Motors, which occupy 90% of finished vehicles, expand their market share further when converting to electric vehicles

If the five-company system collapses, the parts ecosystem will falter… Hyundai Motor and Kia burden likely to increase

Hyundai Motor’s exclusive electric vehicle ‘IONIQ 5’ production line. ⓒHyundai Motors

“Right now, there are no plans to produce electric vehicles. We plan to focus on the new cars we are currently investing in and expand the sales of imported electric vehicles.”

These are the remarks made by Roberto Rempel, the new president of GM Korea, at a joint meeting of union officials held at GM Korea’s Bupyeong plant on the 16th.

In the meantime, General Motors (GM), the parent company, has repeatedly stated that it will operate its production line only with the Trailblazer and new CUV without producing electric vehicles in Korea.

GM Korea’s strategy is to respond to the domestic electric vehicle market by importing US-made models of GM-affiliated brands such as Chevrolet and Cadillac GMC.

Renault Korea, which changed its name from Renault Samsung, is also somewhat passive in responding to the electric vehicle market. Renault Korea President Stefan DeBlez, who took office in March, announced at a press conference on the 10th, “We will launch a new hybrid vehicle in 2024, starting with the XM3 Hybrid at the end of this year, and then launch an electric vehicle in 2026.”

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The plan is to respond to the eco-friendly car market with hybrid models without self-produced electric vehicles for at least the next four years.

Renault Korea's new CEO, Le Tephan De Blaise, answers questions from reporters at a meeting held at Renault Technology Korea on the 10th.  ⓒ Renault KoreaRenault Korea’s new CEO, Le Tephan De Blaise, answers questions from reporters at a meeting held at Renault Technology Korea on the 10th. ⓒ Renault Korea

Ssangyong Motor has been selling the Korando Emotion in Korea since February of this year, but there is a limitation in that it is a retrofit of the existing internal combustion engine Korando. Although it plans to release Torres electric vehicles and KR10 electric vehicles in the future, it is difficult to aggressively invest in new cars due to the uncertain business situation in which a new major shareholder has not been confirmed.

Even if a new major shareholder is decided, it is pointed out that it is difficult in terms of economies of scale to continuously develop and release electric vehicles with low volume for Ssangyong Motor, which has a low domestic market share and does not have adequate overseas sales channels (linked to the parent company brand).

As three mid-tier companies out of five automakers have limited capacity to respond to the electric vehicle market, the domestic electric vehicle industry has taken the form of confronting the attack on imported electric vehicles with its brother companies, Hyundai Motor and Kia’s ‘one-top’.

Currently, in the domestic electric vehicle market, the IONIQ 5, Kona EV (Hyundai Motor), EV6, Niro EV (Kia or higher), Genesis GV60, and G80 electrified models (Genesis) are forming a structure in which they compete against imported electric vehicle models including Tesla. have.

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It is similar to how Pantech disappears from the smartphone market and LG Electronics withdrew, and Samsung Electronics is fighting Apple and Xiaomi alone.

There is concern that such a structure will have a negative impact on the maintenance of the domestic automobile industry ecosystem. Unlike smartphones, automobiles are made up of 30,000 parts, and an industrial ecosystem has been established with automakers and numerous parts suppliers.

The logos of the five automakers.  ⓒDailyanThe logos of the five automakers. ⓒDailyan

Among auto parts makers, there are some exclusive partners that supply only certain companies among the five auto parts companies, including Hyundai Motor and Kia and three mid-sized companies, but many of them are shared by multiple companies. In other words, the five automakers and a number of partners are intertwined to form an ecosystem.

While auto parts makers that have not already responded to the electric vehicle transition are experiencing difficulties, if the proportion of the three mid-tier companies decreases and customers are limited to Hyundai Motor and Kia, a major industrial restructuring will be inevitable. If the parts ecosystem is disrupted, the burden on Hyundai and Kia will inevitably increase.

Hyundai Motor and Kia’s share of the overall automobile market, including internal combustion engine vehicles, is already over 90%. The market share of the remaining 10% or less is divided into three mid-tier companies with a market share of around 3% each. As the transition to electric vehicles accelerates, it is highly likely that Hyundai Motor and Kia’s market share will increase and the proportion of the three mid-tier companies will decrease further.

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An industry official said, “The domestic automobile industry is a relationship of chaos in that if one automaker disappears, the burden of maintaining the industrial ecosystem for the remaining four companies increases.” If Renault Korea and Renault Korea change their business structure to focus on import and sales, the entire ecosystem of the automobile industry could be shaken.”

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