‘Limited semiconductor, what market is it used for?’
This is a common concern for global car manufacturers. Hyundai Motor Company and Kia Motors choose the foreign market rather than the domestic market. This is the result of a combination of factors such as fierce competition in major battlegrounds such as the United States, high exchange rates, and foreign models that use less semiconductors. Thanks to this, Hyundai Motor and Kia achieve the highest ever market share in the global market.
There is also a ‘dark side’. This is an unprecedented waiting period for the shipment of goods in the domestic market. Korean users have to wait 2 years and 6 months after signing the contract to receive the GV80. That is why there are criticisms that Hyundai Motor and Kia recognize the domestic market as ‘rabbits that have already been caught’.
Hyundai Motor exports 60% of domestic production
According to the automobile industry on the 6th, the share of exports from the domestic factories of Hyundai Motor and Kia has increased rapidly over the past two years. Hyundai Motor’s domestic factories accounted for 59.5% (645,379 units) of exports between January and August this year, reaching 60%. It was 49.3% between January and August 2020 and 54.4% for the same period last year. The share of exports increased by more than 10 percentage points since two years ago. The same goes for Kia. From January to August 2020, the share of exports was 55.5% (453,300 units), but jumped to 63.2% last year and maintained a similar level at 62.4% this year.
From January to September this year, the domestic production of Hyundai Motor and Kia increased by 4.6% and 0.5%, respectively, compared to the same period of the previous year. However, domestic sales fell by 8.1% for Hyundai and 2% for Kia. The decrease in domestic sales in a situation where there was a delay in the shipment of goods is interpreted as the reason why the volume went overseas.
In the car market, domestic and foreign demand far outstrips supply. In such a situation, Hyundai and Kia focus on foreign markets and record the largest market share ever in foreign markets.
According to the Association of the Automotive Industry, the share of Hyundai Motor and Kia in the US market was 10.4% in the first half of this year, up 2 percentage points in a year and a half from about 8.3% in 2020, right after Corona 19. In the global pure electric vehicle market, sold 228,588 units from January to August this year, ranking third after Tesla and Volkswagen. The overall European market share also increased from 8.7% to 9.9% during the same period.
Domestic consumers are waiting two and a half years for GV80
There is a reason that the domestic production volume of Hyundai Motor and Kia is used for export rather than domestic consumption. First, competition in the global market is much fiercer than in Korea. It is a big burden for Hyundai Motor Group to fail to sell due to lack of supplies in foreign markets, where if the pace is slowed down, they are immediately eliminated. Hyundai Motor and Kia’s foreign sales account for 60-70%.
The high exchange rate also makes foreign sales more advantageous. Converting dollars earned into dollars earned has a positive impact on performance. Domestic consumers tend to choose more high-end facilities and options than overseas, so the fact that semiconductors are used more is a realistic reason. However, domestic consumers are suffering from a ‘shipping crisis’ because of this. From the 1st of this month, if you sign a GV80 contract in Korea, you will have to wait for 2 years and 6 months. The Santa Fe Hybrid had a waiting period of 1 year and 6 months until last month, but this month it has been extended to 2 years. The Tucson Hybrid will also have to wait 13 months. In the United States, the waiting period for this car is at least six months.
Reporter Park Han-shin/Kim Il-gyu/Kim Hyung-gyu phs@hankyung.com
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