While Hyundai sales continue at a fast pace around the world, at home the South Korean carmaker has experienced a decline in market share as consumers begin to look tentatively at foreign rivals.
Sales of imported cars are reported to have risen by 50% last year and are set to reach 100,000 this year as younger consumers consider less expensive rival brands from abroad.
The growth in foreign vehicle sales in South Korea means an increase in import activity for ocean forwarders that have been carrying luxury models for some time but are now moving mid-range brands. K-Line, for example, which is heavily involved with GMDAT exports (Chevrolet) from South Korea to a number of different countries, also carries BMW and Daimler vehicles from the US to Korea.
The decline in Eukor's Hyundai and Kia volumes in 2010 following Glovis’ move into ocean forwarding for the group has been compensated by significantly higher cargo volumes from other customers and a favourable trade mix, generating higher overall activity year on year.
This burgeoning demand for more foreign brands is starting to affect Hyundai’s market share. While the company’s dominant position in the home market is unquestioned, South Korea is Hyundai’s biggest revenue source, it saw a drop of 5% last year to 45%, the lowest share it has seen for ten years.
Its remarkable growth performance abroad during economic trials that saw the vast majority of carmakers make significant loss may have focused attention on markets abroad at the cost of maintaining its high-level of customer loyalty at home.
South Korea as a whole recorded a surplus in automotive-related trade with the US in 2010, with exports of vehicles and parts rising 24% year-on-year according to the country’s trade ministry. It is reported to have exported cars and parts worth $11.7 billion to the US last year, while it imported $920m worth from there, equalling a $10.8 billion surplus.
Whether the free trade agreements pending full implementation with the US and Europe will result in an increase in foreign brands imported to South Korea, as many are hoping, remains in question.
The European FTA with the EU is set to begin in July following a signing made in October last year at the EU-Korea Summit in Brussels but it was perceived by European carmakers as being full of disadvantages because it will not open the Korean market to European automotive imports (read more here).