Korean-brand cars’ share in China has plummeted from 8.8% to 1%, facing a marginalization crisis.
Once known for being fuel-efficient, durable and affordable, Korean-brand cars are now being forgotten by Chinese consumers. Market share has fallen from 8.8% in 2013 to 1% in 2024. In that year, Hyundai and Kia together sold 320,000 new cars in China — only about 90% of BYD’s monthly sales.
“In the past, our store could sell 600 cars a month and ranked among the top nationwide. Now monthly sales are only a little over 100,” said Zheng Peng, a sales staffer who has worked at Beijing Hyundai for more than ten years, to Jiemian News. Over the years colleagues around him have come and gone — some moved to domestic brands, some to new-energy startups — only he has stayed.
More than a decade ago, Beijing Hyundai’s Sonata and Elantra became mainstay taxi models in cities such as Beijing and Chongqing because of their fuel economy, durability and low maintenance costs. They gradually replaced the “old three” (Jetta, Fukang, Xiali), quickly earning a good reputation and capturing the market.
Now it takes effort to even find a dealer for a Korean-brand. Zheng says, “At the peak, Hyundai alone had 28 dealerships in Beijing; now there are only three or four left. Two of them don’t even want to sell cars anymore — they survive by servicing and maintaining existing owners’ vehicles. Selling cars not only fails to make money now, it can even mean losses.”
According to statistics, the number of Beijing Hyundai 4S dealerships has shrunk from more than 700 in 2013 to just over 200. From 2020 to 2023 alone, the number of Beijing Hyundai dealers fell by more than 300, with roughly 100 dealerships closing each year. At the same time, Beijing Hyundai’s five factories have been reduced to one, with only the Shunyi base continuing production.
While traditional brands are stuck in difficulty, Korean brands’ attempts to move upmarket also failed to break through. Genesis, Hyundai’s premium brand, has not gained market recognition since entering China in 2020. From 2021 to 2023, the brand’s average marketing cost per vehicle reached as high as 710,000 yuan, nearly twice the price of its main-selling models.
As the problem of “selling one and losing on two” brewed within Genesis, the Korean headquarters sent a special audit team in November 2023 to thoroughly review past expenditures in China, focusing on the reasonableness of marketing expenses and causes of losses. Wells Lee, then CEO of Genesis China, reportedly said, “After three years in China, not a single Genesis employee has bought a Genesis vehicle.”
This means that Korean cars, which once set a record of selling one million units in a year in 2013, have now been almost forgotten in the domestic mainstream narrative. Yet while Korean brands are struggling in China, they continue to perform strongly globally. In 2024, Hyundai-Kia Group sold 7.23 million vehicles, ranking third in the world for three consecutive years, behind only Toyota and Volkswagen.
Why can Korean cars thrive globally but stumble in China? Zhang Junyi, former global managing partner at Oliver Wyman, told Jiemian News that the Hyundai-Kia Group did not treat China as a strategic priority, resulting in insufficient resource investment. “The Chinese market is too competitive. Korean automakers are unwilling to follow the market here and pursue non-profitable growth,” he said.
Some believe the decline of Korean cars in China is far from a simple market fluctuation; it is a crisis caused by strategic misjudgment, insufficient localization and flawed product strategies. The root cause is that Korean automakers long marginalized the Chinese market. They neither delegated decision-making power to local teams nor timely perceived shifts in Chinese consumer demand, ultimately leading to delayed product iteration, weak technical reserves, fuzzy brand positioning and other concentrated problems.
This marginalization is reflected not only at the strategic level but also in concrete market actions. Take Beijing, for example: it is almost impossible to find Korean-brand showrooms in core commercial districts. According to Jiemian’s visit, Hyundai has only one imported-channel showroom in a core business district, displaying just three imported models with starting prices all above 200,000 yuan — sharply at odds with local consumers’ preference for high value-for-money models.
On the product side, Hyundai China currently has only ten models on sale, among which imported models perform poorly and the domestically produced key models are mostly long-outdated “classics.” Compared with new players’ release pace of two to three new models a month, Korean brands lag in product update frequency and market responsiveness, and thus fail to meet Chinese consumers’ urgent demand for intelligence and electrification.
Zhang Junyi believes another core issue is the Korean automakers’ slow response to China’s new-energy policies. “As a joint venture brand, Hyundai and Kia did not adopt China-specific new-energy development paths; they continued to use a global unified approach, resulting in poor local adaptation.”
Zheng Peng said that among nearly ten models on sale at Beijing Hyundai showrooms, almost all are conventional gasoline models and thus do not benefit from new-energy purchase tax exemptions. The only pure electric model currently available is the newly launched Yio, and the only hybrid is the imported Palisade. As the flagship SUV, the Palisade’s starting price is close to 300,000 yuan, deterring consumers interested in new energy vehicles.
Consumer Zhang Ping told Jiemian that Korean brands still use traditional configuration strategies, attracting buyers with low-trim, low-price models while the actual user experience has clear shortcomings. “Although Korean cars create an appearance of high value-for-money through large discounts, this value often stays at the price level.”
He gave examples: low-trim Korean models typically cut basic comfort features such as seat heating and ventilation, in sharp contrast to domestic entry-level models that often come standard with L2 driver assistance and intelligent cockpits. When consumers move up to higher trims, prices rise sharply, making them more expensive than domestic or new-energy mid- to high-end models.
Moreover, advanced driver-assistance features in Korean cars remain concentrated in top trims, lagging behind domestic brands and new-energy players that have moved intelligent driving functions down to mid- and low-end models.
In the gasoline era, Korean cars occupied a middle ground: technically better than domestic cars, with more features than Japanese cars, and reasonably priced. But as Chinese brands’ technical capabilities have improved, and Japanese and German joint-venture brands have been forced to add features and cut prices, Korean cars have been squeezed in the middle and have lost their competitive advantage.
Toyota and Honda have already begun to adjust proactively. At the Shanghai Auto Show, Toyota for the first time introduced a China chief engineer system, shifting R&D decision-making from Japan to China. Nissan has let its China R&D team lead model development, and domestic-market new-energy models such as GAC Toyota BZ3X and Dongfeng Nissan N7 have been launched densely.
As Beijing Hyundai’s only pure electric model, the Yio caused a stir when it was launched at the end of October. Zhou Bin, Beijing Hyundai’s deputy general manager, accused some carmakers at the launch of using marketing rhetoric such as “far ahead,” repeated brainwashing and inflated orders to grab consumer mindshare, calling it part of market chaos.
With new-energy vehicles approaching nearly half of the market, this EV drew attention. Zheng Peng revealed that this model averages about one sale per day, accounting for nearly 20–30% of the brand’s sales. Sales staff generally remain optimistic about Beijing Hyundai’s new-energy prospects.
Notably, in November 2025, the registered capital of Hyundai Motor (China) Investment Co., Ltd. increased from $243 million to $270 million, an 11% rise. Established in 2004, the company’s business scope includes research into new-energy and intelligent driving technologies and is jointly controlled by Hyundai and Kia. The capital increase may be seen by outside observers as a signal that Korean brands are stepping up investment in China.
Some argue that amid the twin waves of electrification and intelligence, the “value-for-money” edge of Korean cars is gone. They need to redefine their value proposition: not being technically better than domestic cars, but understanding China better than domestic rivals. That requires not only technology but a deep understanding of the Chinese market. Perhaps what consumers need is not a “China version” of Korean cars, but Korean cars “born for China.”
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