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More trouble for Hyundai PH as it reports zero sales for passenger cars in January

More trouble for Hyundai PH as it reports zero sales for passenger cars in January

Charles Buban

Ever since a rumor surfaced two years ago that Hyundai Motor Co. of Korea—the mothership—might take over the importation and distribution of its vehicles in the Philippines, things started to become less pleasant for its local partner.

The latest travail is clearly stated in the January 2022 sales report of the Philippine Automotive Dealers Association or PADA wherein Hyundai Asia Resources, Inc. (HARI) sold only three units—all commercial vehicle models as no passenger car model was sold for the whole month.

This is most unusual for what was once one the country’s most valuable car brands. From finally entering the Top 5 ranking in 2006, Hyundai, through the stewardship of Hari, was the country’s third largest market-share holder from 2012 to 2014. While it went 5th in 2015, Hari regained its Top 3 ranking from 2016 to 2018. And while still ranked 4th in 2019 and in 2020, which was particularly difficult for the entire auto industry due to the pandemic, Hyundai suddenly fell to 8th place in 2021 after Hari sold a total of 9,061 units.

It was a sharp 44.57 percent decline from 2020 figures when Hari sold 16,346 units and quite out of character for a three-time Hyundai Motor Global Distributor’s Asia-Pacific Distributor of the Year.

The latest PADA report is some sort of a nightmare for Hyundai and its network of dealers as it is among several brands reporting zero sales for January. Although premium brands often decide to keep their numbers to themselves, it is very unusual for a former Top 4 like Hyundai not to be logging a single sale in a month.

It is also the first time in more than a decade than Hyundai was booted out of the Top 10 rankings of the automotive industry.

A dealer principal who requested anonymity said that it (zero sales) is possible. “We’ve been left groping in the dark for two years now and we don’t have anything to sell anymore,” he said.

So what is happening? Granted that the last two years were particularly difficult for the entire car industry due to the pandemic, the provisional safeguard duties on imported vehicles, and the global chip shortage, HARI never dipped so low in the ranking considering the formidable lineup of vehicle models it offers.

Then last October 2020, Hari surprised many when its president and CEO, the fiercely competitive Ms Ma. Fe Perez-Agudo, also became the president and CEO of Changan Motor Philippines, Inc., the official distributor of Changan brand of vehicles in the country.

Suddenly, HARI ceased conducting major activities for any of its new models while few of its dealerships have divided up their showroom to give way to Changan. Hari also closed down some of its showrooms, citing the pandemic as the main culprit.

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Then in December, a news story came out in the Korea Economic Daily: Hyundai Motor Co. is now set to manage its Asia-Pacific markets.

Through the reorganization, Hyundai’s South Korean business unit will be made in charge of the Asia-Pacific region (with the exception of China and India, considering their market sizes) taking charge of the product and service planning as well as marketing and sales.

The report added that as Hyundai focused on Southeast Asia, it will make Indonesia, its core strategic base thanks to its high-potential market (annual new vehicle sales is already close to 1 million units) and the fact that the Korean auto giant is investing $1.1 billion in an electric vehicle battery cell factory since Indonesia is the world’s top nickel producer as well as cobalt, both key raw materials for EV battery production.

As for its Philippine partner, it seems HARI is now set to move on to the next phase of its corporate life.