Hyundai Motor and affiliate Kia Motors are planning three low-cost sport utility vehicles (SUVs) for China, their biggest market.
It’s a big shift for the South Korean automakers, whose strategy of appealing to price-conscious Chinese buyers with older model versions has faltered as local brands surge.
The budget SUVs will be rolled out next year, Reuters reports.
Hyundai and Kia’s China market share slid to a seven-year low of 8.9 percent last year from 10.4 percent in 2014, according to company data, hit by the rise of Chinese rivals including Great Wall Motor.
The drop in annual sales was the biggest among the top 10 automakers in China, data from IHS Automotive showed.
Hyundai and Kia, which entered the Chinese market in 2012, rank third behind Volkswagen and General Motors.
But Chinese brands are gaining share by copying Hyundai’s original formula — sleek, but affordable, smaller models.
The battleground has shifted from sedans to SUVs, which are increasingly popular and affordable partly due to the slide in oil prices.
Hyundai plans to build a compact, no-frills SUV at its planned factory in Changzhou starting in November 2017 and a subcompact SUV at its new Chongqing factory in 2018, two of the sources told Reuters.
Kia will follow with its own subcompact, entry-level SUV in 2018, another two people said, with one adding that Kia also plans to produce its mid-sized SUV in China next year.
“After missing out on a segment where Chinese have a head start, Hyundai is rushing to build small SUVs,” said one of the individuals, declining to be named as the plans are private.
– Contact us at email@example.com