Automakers in South Korea are expected to vie fiercely for a bigger slice of the market for subcompact sport utility vehicles following Hyundai Motor Co.'s entry into the fast-growing segment, analysts said Wednesday.
In an extravagant rollout in Seoul, South Korea's leading automaker Hyundai unveiled its first subcompact SUV Kona in an effort to bolster its SUV lineup amid growing demand for recreational vehicles.
Hyundai's move comes amid surging sales of subcompact SUVs in the country, led by Ssangyong Motor Co.'s Tivoli, Renault Samsung Motors Corp.'s QM3 and GM Korea Co.'s Trax.
GM Korea and Renault Samsung Motors sold a combined 9,214 small SUVs in 2013, but the number soared to more than 82,300 units in 2015 as Ssangyong's Tivoli became an instant hit with sales of over 45,000. Last year, shipments grew 4.8 percent on-year to upwards of 86,000 units.
Hyundai Motor Co.'s Kona (Hyundai)
Globally, sales of subcompact SUVs hit 4.6 million units in 2016, nearly 10 times the 485,000 vehicles sold six years earlier.
In the launch ceremony, Hyundai's Vice Chairman Chung Eui-sun stressed the need to tap into the soaring segment amid slumping exports and stubbornly weak domestic demand.
"The global SUV market has grown at an average of 20 percent in the past seven years. In particular, global carmakers are vying for a bigger share in the subcompact SUV market," Chung said in a press conference for the Kona's world premiere.
The debut of the Kona has left Ssangyong, Renault Samsung and GM Korea on edge. Market watchers say Hyundai's new vehicle could come as a game changer should the carmaker mount a sales campaign by harnessing its brand power and pitching the Kona's strong features.
The Kona SUV is mated to either a 1.6-liter gasoline turbo engine or a 1.6-liter diesel engine and fitted with a seven-speed dual clutch transmission. The Kona is priced at between 19 million won ($16,900) and 27 million won for domestic motorists.
Currently, Ssangyong dominates the domestic market for subcompact SUVs with an estimated share of 67 percent, followed by Renault Samsung with 20 percent and GM Korea with 13 percent.
Industry sources said segment leader Ssangyong seems to be putting on a good face for the debut of a strong rival, believing that the Tivoli is competitive in terms of price and space. The starting price of the Tivoli is slightly lower than the Kona.
Renault Samsung is poised to counter Hyundai's offensive by stressing that its QM3 has long been a bestseller in Europe and other overseas markets on the back of its excellent fuel economy and driving efficiency. The QM3's mileage amounts to 17.3 kilometers per liter, compared to 16.8 kpl for the Kona and 14.7 kpl for the Tivoli.
"In order to counter escalating competition in the small SUV segment, Renault Samsung will wage a marketing campaign by stressing its sleek design as well as top-tier fuel and driving efficiency," a company official said. (Yonhap)