Modern Kia's "second Entrepreneurship" in China: re-introduction of Localization and introduction of hydrogen fuel Cell passenger cars

Even though the business sector in China has gathered a group of Chinese professional managers, including Li Hongpeng, Li Feng and Dongfang Equal, in the new China strategy released by Hyundai Kia on April 16, the most mentioned is still "localization".

"in China, there are the largest and youngest consumer groups in the world, the most complex and diversified car scenes. The four core strategies of Hyundai Kia's development in China are to strive to achieve a new leap in the Chinese market and lay the foundation for global success. " Li Guangguo, president of Hyundai Motor Group (China), said.

Hyundai Kia's newly released China strategy includes further strengthening local research and development, launching exclusive products and services for Chinese consumers, introducing exclusive electric vehicle products into the Chinese market, and making full use of the group's hydrogen fuel cell technology. to help China transform into a hydrogen society; and to promote the transformation and upgrading of Beijing Hyundai and Dongfeng Yueda Kia joint ventures.

"it is not too late for Hyundai to enter the Chinese market, and it has achieved good results. However, under the guidance of sales-oriented strategy for a long time, brand construction has been neglected. " Some industry analysts believe that Hyundai, which simply pursues sales, will eventually get itself into trouble in the Chinese market when the market environment and industrial pattern have undergone drastic changes.

The data show this. In 2002, Hyundai Motor entered China and established Beijing Hyundai in a joint venture with BAIC, which once created the "North present Speed". By 2016, sales of Beijing Hyundai and Dongfeng Yueda Kia both peaked, with Beijing Hyundai selling 1.138 million and Dongfeng Yueda Kia 650000. But after that, the complex internal and external factors of the market have gradually squeezed the living space of Korean cars, and the market performance of the two car companies has entered a downward channel.

Data show that in 2020, Beijing Hyundai sold 502000 vehicles, compared with the target of 750000, the completion rate was only 66.9%; Dongfeng Yueda Kia 249300, down about 14% from the same period last year. In terms of overall market share, the market share of Korean cars fell from 4.7% to 3.5% in 2020, only higher than 0.3% of French cars. More significantly, this is the fourth year in a row that sales in Beijing Hyundai have fallen-from 816000 in 2017 to 502000 last year, a cumulative decline of nearly 40 per cent.

From the industry's point of view, in the face of such difficulties, the new China strategy released on April 15 can be seen as Hyundai's "second venture" in the Chinese market, that is, from the brand, research and development, models and new technology and other four aspects or "push to start all over again", or "step up".

"We plan to establish the group's first overseas leading digital R & D center in Shanghai in the second half of this year, focusing on the four major technological development directions of autopilot, interconnection technology, electrification and shared travel." Du Sikai, general manager of Hyundai Kia Automobile R & D Center, said that at present, China is the region with the most active (ICT) and digital transformation of communication technology in the world. As part of the global R & D network of Hyundai Automobile Group, China's local technology and service achievements will also be applied globally.

In the field of electrification, the first to be launched in the Chinese market will be the modern IONIQ based on the modern pure electric platform E-GMP and Kia EV6, will then launch pure electric models and exclusive pure electric models in the Chinese market every year. According to the plan, Hyundai and Kia plan to expand the new energy product matrix in China to 21 by 2030, covering hybrid vehicles and hydrogen fuel cell vehicles.

The hydrogen fuel cell sector is another important component of Hyundai Kia's business in China. On January 15 this year, Hyundai signed an investment agreement with the government of Guangzhou Development Zone to establish Hyundai Automotive hydrogen fuel Cell system (Guangzhou) Company in Guangzhou, which is 100% owned by Hyundai Motor. The new plant is scheduled for mass production in the second half of 2022, with an initial planned annual production capacity of 6500 sets.

"(Guangzhou hydrogen fuel Cell Plant) is expected to have a total investment of 8.5 billion yuan by 2030. This hydrogen fuel cell system is not only suitable for passenger cars. It will also be extended to commercial vehicles, trains, urban rail transit, ships and drones." Li Guangguo revealed more information than what was disclosed when he signed a contract with Guangzhou nearly three months ago. "in the second half of this year, we will launch the commercial trial operation of hydrogen fuel cell vehicle NEXO in China and participate in the formulation of China's hydrogen energy technology standards."

Compared with the continuously expanding lineup of new energy models, Hyundai Kia plans to significantly reduce the number of traditional fuel vehicles in the future. By 2025, Hyundai and Kia will optimize the number of fuel models sold in China from the current 21 to 14.

For Hyundai and Kia, 2021 is a key point for Hyundai and Kia to realize the success of "second entrepreneurship" by regaining the strategy of "localization" in China.