If Beijing Hyundai doesn’t launch electric vehicles, will it be forced to withdraw from China?

According to Seoul Economic Daily, Hyundai Motor’s subsidiary in China, Beijing Hyundai Motor (BHMC), has been completely halting production of small cars for several months due to opposition from its local partner, Beijing Automotive Industry Investment Co., Ltd. The partner said that the production of small cars has low sales and low profits, and asked to produce more high-end cars. BAIC also asked to stop using Hyundai Mobis parts and replace them with Chinese parts to reduce costs. Last year, the factory had suspended production due to a conflict with the partner, and now it has caused a storm again.

Hyundai Motor and BAIC each hold 50% of Beijing Hyundai's shares. Dr. Lee Hang-kyu of the Korea Institute for Industrial Economics and Business said, "After Beijing Hyundai was established in 2003, Hyundai Motor had the technical advantage of producing complete vehicles and took the lead, but is giving up the lead amid declining sales and reduced profits."

Beijing Hyundai Motors has only one product line and has not launched any new energy vehicles

Zhang Gang, a financial commentator of Economic Daily and China Economic Net, said that the decline in Beijing Hyundai's sales is related to its single product and the increase in similar products in the Chinese market. Beijing Hyundai's cars are mainly China Sonata, which was originally used as a taxi product and once had a high market share in northern China. However, with the launch of pure electric vehicles by BAIC, its operating costs are much lower than those of fuel vehicles, so taxi drivers are more willing to choose pure electric vehicles to operate. Beijing Hyundai has not launched its own new energy vehicle products, so its market share has declined.

China's car-sharing sector has huge room for development

Zhang Gang said that in China, the field with the largest space for future automobile development is still in the field of new energy vehicles, especially shared cars. At present, the problem of traffic congestion in large Chinese cities is serious, and it is becoming increasingly difficult and costly for individuals to own car licenses. It often takes a long time to wait for a car license through the lottery, so some shared car companies have appeared in the market, and more similar companies are expected to appear in the future. Now that pure electric vehicle technology is becoming more and more mature, and the construction of related supporting measures is becoming more and more complete, we can make efforts in related fields.

Beijing Hyundai needs to launch mature electric vehicles to reverse the situation

Zhang Gang believes that if Beijing Hyundai cannot produce mature pure electric vehicles in China like international giants such as Daimler-Chrysler, it will probably be forced to withdraw from the Chinese market. Currently, the pure electric vehicles jointly produced by Daimler-Chrysler and BYD have a relatively high market share in China. BAIC is also cooperating with Daimler-Chrysler to produce pure electric vehicles, and Tesla will also invest in building a factory in Shanghai. Therefore, if Hyundai wants to reverse the current situation, it must launch competitive pure electric vehicle products.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.