Recently, Yueda Kia released its sales data for August. In August 2024, Yueda Kia sold 22,498 units, up 36.2% year-on-year and 1.5% month-on-month. Vehicle production in August totaled 22,000 units, reflecting a 19.6% y/y increase and a 2.8% m/m increase. From January to August 2024, cumulative sales reached 154,243 units, up 61.3% year-on-year, ranking first among joint venture brands, with a cumulative production of 149,160 units, up 92.7% year-on-year.
In recent years, the Kia brand has become less and less present in China, but surprisingly, its sales have increased significantly recently.
Say goodbye to the Golden Age
Kia continues its transformation
It is undeniable that Kia's golden age in the Chinese market seems to be gone. The models once represented by the K5 have won the love of consumers with their excellent cost performance. But as time went on, Kia's growth momentum began to slow down, and both brand value and market share declined.
In recent years, the rise of domestic brands has posed a huge challenge to a number of joint venture brands, especially in the entry-level market. In the past, Kia was a compromise between European, Japan brands and domestic brands, but with the gradual improvement of the quality of Chinese brand models, and even the market of mainstream joint venture brands is gradually encroaching, Kia's living space will naturally become narrower.
For example, the Kia K5, which has just been launched recently, has technology, good looks, and cheap price, so it is said that it should have a good degree of attention. But in the automotive market, Japanese cars are known for their reliability, German cars are known for craftsmanship and technology, and American cars are recognized for comfort and solid materials. So, what is the core competitiveness of Korean brands, especially Kia?
On a technical level, Kia has yet to introduce some cutting-edge technology. While some praised the CVVD engine technology, it did not form a clear lead in the market and did not become a hallmark feature of the brand. Compared to Toyota's hybrid technology, Volkswagen's EA888 engine series, and Honda's IMMD system, Kia's CVVD does not significantly widen the gap. In terms of cost performance, the "cost-effective" strategy of domestic cars has been deeply rooted in the hearts of the people. As for design, although this is a subjective area of evaluation, it is clearly not Kia's core competency.
As a result, Kia gives the impression that it is trying to dabble in many aspects, but in the end it does not develop its own unique and outstanding strengths, which is where Kia needs to think deeply and break through.
When price/performance is no longer its only selling point, Kia needs to rethink how it builds new competitive advantages in terms of technology, design, reliability, and more. Hitting the mid-to-high-end market may be a good direction, so Kia Motors launched MPV models such as the Carnival, but the final sales were not ideal, which also reflects Kia's lack of competitiveness in the mid-to-high-end market. Although the Kia Carnival excelled in terms of space, comfort, and practicality, its market performance was not as good as expected. At the same time, it shows that there is a mismatch between Kia's product strength and market acceptance.
In the face of the current difficulties, the future development of Kia Motors in the Chinese market is full of challenges. Brand appeal and value are areas that Kia needs to focus on. Only through continuous innovation and market strategy adjustment can Kia find a new way out of the fierce market competition. Defining the core value of their brand, and developing and marketing products around that value is key to regaining recognition in the Chinese market.
Take a different path
Kia has found a new way out
So the question comes back, how did Kia Motors, which still sells well in the Chinese market, achieve a significant increase in sales? This is due to Kia Motors' strategy of "domestic sales and export sales at the same time".
At the end of 2021, Dongfeng Group sold 25% of its shares in the company, marking the transformation of Dongfeng Yueda Kia from a tripartite joint venture model to a pattern of joint shareholding between two companies. After the adjustment, the 25%, 25% and 50% shares originally held by Dongfeng Motor, Yueda Investment and Kia Motors respectively were changed to 50% of the shares held by Yueda Group and Kia Motors.
After completing the optimization of the shareholding structure, Yueda Kia has made expanding exports to overseas markets the core of the company's strategy, aiming to improve the operational efficiency of production facilities and enhance profitability.
At the product level, although the traffic of Kia Motors has not been high in the past two years, Kia Motors can still be seen at various auto shows striving to promote the transformation of electrification, among which Kia's first EV5, which was first launched in China, produced in China's intelligent manufacturing factories and sold worldwide, is a good example.
At the same time, at the beginning of this year, Jiangsu Yueda Kia announced that it would build its Yancheng plant into a core base for its global exports, further expanding the export business of finished vehicles and CKD. At present, EV5 has been successfully exported to many developed countries including Australia and New Zealand, as well as major global markets such as Thailand, Qatar, Chile and Colombia.
In addition, the EV5 and other models such as Liontop, Setus, K5, Sonay, Huanchi, etc. form a strong export product lineup, its cumulative export sales have exceeded 3.6 billion US dollars, and the products are exported to Australia, New Zealand, Brazil, Chile, Malaysia, Singapore, Saudi Arabia and other countries.
In addition to the export of finished vehicles, Yueda Kia has also achieved good results in the field of engine exports. Since the start of this business in December 2018, Yueda Kia has exported more than 300,000 engines to Korea, Russia, Slovakia, the Czech Republic, India, Viet Nam and other countries.
Uncle Che concluded
Although Kia's parent company, Hyundai-Kia Group, has been firmly in the top three global automakers, second only to Toyota and Volkswagen, and the global sales of the Kia brand exceeded 3.08 million units last year, on par with BYD, the sales champion in the Chinese market, but it is undeniable that Kia is still a "lost" brand in the Chinese market, and in the face of the wave of transformation of the Chinese auto market to new energy, Kia has not yet been able to launch new energy models that are enough to form a competitive advantage in the market. Whether Kia will regain its foothold in the domestic market in the future seems to be facing many challenges. But at least relying on the low-cost advantage in the Chinese market and continuing to expand the profitability of overseas markets is also a good way for Kia.