Hyundai and affiliate Kia are losing market share in the U.S. and Europe amid the resurgence of global rivals and cheap Japanese yen.
The combined U.S. market share of the two carmakers fell to seventh place behind Nissan in August, while their domestic market share from January to August fell to 60 percent, the lowest level in six years.
Japan's Toyota, Honda and Nissan, meanwhile, are seeing skyrocketing sales thanks to the weak yen, while GM and Ford are also selling more cars as the U.S. economy recovers.
◆ Sales Down in Key Markets
The world's leading automakers -- GM, Toyota, Ford, Honda, Chrysler and Nissan -- on Wednesday announced their August U.S. sales results, which showed combined car sales up 16.8 percent compared to the same period of 2012 at some 1.5 million vehicles.
Toyota, Honda and Nissan saw sales soar more than 20 percent.
But Hyundai and Kia saw sales rise only 6.8 percent in August, reducing their market share to 7.9 percent.
The same trend has been evident in Europe, where their combined first-half sales fell 1.5 percent on-year. The market share also fell to 6.2 percent as of June after peaking at seven percent in December 2012.
Hyundai and Kia managed to keep their prices competitive in overseas markets due to their near-monopolistic position in Korea. But even that has now come under threat. Their share of the domestic passenger car market fell below 70 percent for the first time since 2008 to 66.3 percent this year.
Meanwhile, imported cars increased their share of the Korean market from 10 percent in 2012 to 11.5 percent this year.
◆ Resurgent Rivals
The recovery of leading foreign automakers is putting the brakes on Hyundai and Kia's performance. America's Big Three and Japanese carmakers are emerging from the impact of the global financial crisis, massive recalls and other misfortunes.
The Korean auto giants have also suffered production disruption due to strikes at home. The famously strike-prone labor union at Hyundai has been downing tools for up to eight hours a day since the middle of August, demanding higher wages, which the automaker claims had resulted in a shortfall of 50,000 vehicles until Thursday.
Hyundai's Korean plants supply 44 percent of vehicles sold in the U.S.
The strikes happen every year. Hyundai management is currently threatening to move more production overseas. Last year, the firm sold 1.26 million cars in the U.S., but its plants there roll out only 720,000. "We need to make cars quickly in Korea and ship them out, but the repeated strikes have impacted stable output making it necessary to build plants overseas," a Hyundai spokesman claimed. "We intend to choose a new site within six months."