Can Hyundai Motor stage a comeback in China?

Hyundai Motor Group is seeking to restore its relevance in China, but analysts say the odds of a meaningful turnaround are slim in the country's hypercompetitive auto market.

"Hyundai will open up its core capabilities in electrification and intelligent technologies, dispatch senior technical experts, and introduce its premium brand into China,"Beijing Hyundai, the carmaker's joint venture with BAIC Group, said in a statement.

The statement followed a mid-January meeting between Hyundai Motor CEO Jose Munoz and BAIC Chairman Zhang Jianyong, their second in a year.

BAIC has pledged resource sharing, a joint R&D platform, and support in areas ranging from talent deployment to marketing, in a bid to help the joint venture achieve a step change in its push toward premium positioning and deeper localization.

The outlook, however, appears less optimistic than the executives' rhetoric suggests and the wording itself is telling.

Hyundai is still in the process of "opening up" its electrification capabilities to its joint venture, while new energy vehicles now account for over half of China's auto sales.

Rivals such as Volkswagen and Toyota have empowered their Chinese teams to tailor products to local consumers. Even these much earlier moves are seen as possibly futile.

"The focus of China's auto market has shifted to domestic brands," said Joel Ying, an analyst for China Auto & Parts and Technology Research at Nomura.

He said core technologies and development directions in the automotive market are now largely driven by Chinese automakers and supply chains.

Another analyst, who declined to be named, questioned Hyundai's willingness. "Hyundai talks up the strategic importance of China, but its real focus has long been on western markets," said the analyst. "That helps explain why a global top-four automaker has become a marginal player in the world's largest car market."

For example, Hyundai did not relocate the departments overseeing its China operations from Seoul to Beijing until 2019.

The group also recruited several senior Chinese executives around 2020, assigning them tasks including import operations. Many left soon after, having lacked sufficient authority to implement substantial changes.

That lag is visible at the product level. Beijing Hyundai has only one electric vehicle in the market, the Elexio, launched in late October.

Built on Hyundai's E-GMP platform, the vehicle offers a claimed range of 722 kilometers and smart driving solutions supplied by Chinese firm Haomo. AI, which is now on the verge of bankruptcy.

Despite being a landmark for the joint venture, the Elexio has failed to win over Chinese buyers. Sales reached just 221 units in November and 228 in December — tiny numbers in a market of 1.5 million NEVs monthly.

At the launch, Beijing Hyundai announced plans to roll out 20 models by 2030, including 14 NEVs, aiming to lift annual sales to 500,000 units.

That would more than double its 2025 sales of 210,000 vehicles, marking the joint venture's first annual growth after eight consecutive years of decline, partly driven by exports of 60,000 units.

Its sales peaked at 1.14 million units in 2016 before sliding steadily to fewer than 160,000 vehicles in 2024.

Hyundai's other Chinese joint venture, Jiangsu Yueda Kia, delivered 254,000 vehicles in 2025, up 2.3 percent year-on-year, also supported by growing exports.

During his latest visit, Munoz mentioned plans to introduce Hyundai's premium brand into China without giving specifics.

Reports suggest this may involve selling Genesis vehicles through Beijing Hyundai dealerships, seeking to leverage the experience of the joint venture's new CEO, Li Fenggang, a former senior executive at FAW Audi.

Both Hyundai's performance sub-brand N and its luxury marque Genesis are present in China, with South Koreans at the helm, though neither has met internal expectations.

Genesis appointed a new China chief executive earlier in January — the fourth since its re-entry in 2021.

The company offers only gasoline models and operates 15 dealerships nationwide. By contrast, FAW Audi has around 600 dealerships.

In March 2025, Izzy Zhu, the then CEO and only Chinese executive among the four, said Genesis could begin local production within three to five years. He resigned in August, less than a year after taking the role.

"There is little chance, if not at all, for Genesis to make it in China, whatever Hyundai said," said the analyst who wishes to stay anonymous.

"First, foreign brands no longer enjoy the magic aura they once did. Also, unlike European marques, Hyundai does not usually evoke an image of luxury in the minds of Chinese consumers," the analyst added.

lifusheng@chinadaily.com.cn