Hyundai Motor, Korea’s leading automaker, has decided to stop selling passenger vehicles in one of the world’s most competitive markets - Japan - due to stagnant sales figures.
The group’s Japanese unit announced its decision late on Friday. Hyundai Motor Japan said it would focus on buses instead.
According to the local unit, Japanese drivers only buy 1,000 to 2,000 Korean vehicles each year. Since 2000, when Hyundai Motor set up shop in Japan, it has sold 15,000 units.
Last year, Hyundai Motor sold 496 units, while this year vehicle sales totaled just 764 in the first 10 months. This is in stark contrast to the brisk sales the company is enjoying in China and the United States recently.
A poor exchange rate contributed to a lack of price competitiveness in Japan, which in turn ate into Hyundai’s image among the Japanese public. The Japanese unit has seen an annual deficit of 10 billion won ($8.5 million) to 20 billion won. The end of passenger car sales in Japan was reported to Hyundai Motor chairman Chung Mong-koo in October.
In Japan, Hyundai had been selling the Avante, Sonata and Grandeur, all developed for U.S. consumers. For that reason, the vehicles were considered inappropriate for Japanese road conditions and consumer preferences. In Japan consumers are more interested in compact vehicles rather than larger sedans, and even that category is already dominated by high-end European vehicles.
Buses sell for around 25 million yen ($290,000) with annual sales of about one million units in Japan.
Hyundai Motor pulled its passenger vehicles out of the Tokyo Motor Show just a week before it opened in October, but introduced 30-seat and 51-seat high-end buses in Japan that same month. To compensate for lost Japanese sales, Hyundai plans to concentrate on other markets including U.S. and China.
“Even if passenger vehicles stop selling we will continue providing after service for Hyundai Motor vehicle owners,” said a Hyundai Motor official.