Mar 31, 2024 - Business

Hyundai and Kia are quietly taking over America's driveways

Side-by-side images of the Genesis Neolun concept, a vision of what a full-size luxury SUV from the Hyundai Motor Group might look like

The Genesis Neolun concept, which envisions a full-size luxury SUV from Hyundai Motor Group. Photo courtesy of Genesis

Auto shows don't have as many glitzy debuts as they used to — except when it comes to the relentless Korean brands Hyundai, Kia and Genesis, which keep rolling out new models at a blistering pace.

Why it matters: Hyundai Motor Group — the parent of all three brands — is arguably the hottest carmaker in America, stoking consumer interest with fresh, sometimes risky designs, high-tech features and a hard-won reputation for reliability — at a price that typically beats the competition.

  • The group is now the fourth-largest automaker in the U.S., behind General Motors, Toyota and Ford, having overtaken Stellantis, maker of Jeeps and Ram trucks, last year.
  • Globally, it's No. 3, behind Toyota and Volkswagen Group.

Driving the news: The Korean trio dominated last week's new model introductions at the 2024 New York International Auto Show, which continues through April 7.

  • Hyundai debuted a new version of its bestselling Tucson SUV, with a dramatic interior upgrade and new infotainment technology, along with a refreshed Santa Cruz "sport adventure vehicle."
  • Kia unveiled its new K4 compact sedan, sharply designed with an array of tech and safety features rarely found in small cars.
  • Genesis, the group's luxury nameplate, launched a new high-performance line called Magma and unveiled a dazzling concept, the Neolun, that suggests what a future full-size electric SUV could look like.
  • Kia and Hyundai electric vehicles (EVs) also nabbed three of the six World Car of the Year awards, presented annually at the New York show.

Between the lines: Hyundai Group's scrappy, risk-taking culture, especially during uncertain times, is a big reason for its success, industry experts tell Axios.

  • In 2009 during the Great Recession, for example, Hyundai made an unusual offer: Anyone who bought a Hyundai and later lost their job could return it without affecting their credit.
  • The company reprised the program during the COVID-19 pandemic.
  • "They gave people confidence during an uncertain environment," says Stephanie Brinley, principal automotive analyst at S&P Global Mobility. "The message to consumers was, 'We've got your back.'"

Friction point: Kia and Hyundai recently tried to make good with customers whose cars were susceptible to theft in a TikTok-fueled craze.

  • They gave away free steering wheel locks and offered software and hardware upgrades to owners whose cars lacked common anti-theft engine immobilizers.
  • The fiasco proved costly, however. This summer a judge is expected to finalize a $145 million class-action settlement.

What they're saying: Hyundai and Kia are now seeking to become EV leaders.

  • "For EVs, everyone has a blank slate and is starting over. So what you want to do strategically is to run out ahead of everybody else as fast as you can and gain that share," Steven Center, Kia America's chief operating officer, tells Axios.
  • "There's too much to lose."

Zoom in: When the imported Hyundai Ioniq 5 and Kia EV6 lost their eligibility for federal tax credits under 2022's Inflation Reduction Act, the resulting price disadvantage caused their market share to skid.

  • The brands pivoted to leasing, which didn't face the same restrictions.
  • Now, roughly half of Hyundai and Kia EVs are financed through attractive lease deals, like this "crazy cheap" $239-per-month offer on the Ioniq 6 spotted recently by automotive search engine CarsDirect.

By the numbers: After a brief dip, Hyundai Group's EV sales are once again surging, accounting for a healthy 7.8% of the EV market.

  • "It's persistence and diligence," says Brinley. "They never really lift. They just keep going."

What's next: "America is our most important market, and so we are betting really big time here," Jose Munoz, president and global chief operating officer of Hyundai Motor Co., tells Axios.

  • That means doubling down on EVs, including through a $12.6 billion assembly plant near Savannah, Georgia, and two joint venture battery factories with Korean partners (reopening access to U.S. tax credits).
  • In Korea, meanwhile, Hyundai announced plans to invest $51 billion to ramp up electric vehicle development and production.

What we're hearing: There are industry whispers that Hyundai and Kia are scoping out the electric pickup market.

  • With lots of new entries in the segment, it sounds like an uphill battle — but that hasn't stopped them before.
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