Hyundai to Become World's 3rd-Largest Automaker

Hyundai and affiliate Kia were probably the world's third-biggest automaker after Toyota and Volkswagen last year by selling an estimated 6.84 million cars. 

The feat comes 12 years after the Korean conglomerate overtook Ford to become the world's fifth-largest automaker and a year after it surpassed GM for the No. 4 spot. 

Most global automakers' sales declined in the second half of last year due to a shortage of microchips, but Hyundai and Kia managed to overcome the odds by managing supply chains efficiently and rolling out competitively priced models. 

Toyota sold 10.4 million cars last year, down one percent, to rank at the top, followed by Volkswagen, whose sales fell seven percent to 8.3 million. The Renault-Nissan-Mitsubishi Alliance, which competed with Hyundai for the No. 3 spot, is estimated to have sold 6.25 million vehicles. 

Renault's sales fell 5.9 percent to 2.05 million, while Nissan sold 3.2 million cars and Mitsubishi 1 million. 

Fifth-ranked Stellantis, a giant created by the merger of Peugeot Citroen and Fiat Chrysler, saw European sales plummet more than 10 percent last year to 6.05 million cars. 

But Hyundai managed to boost its combined global sales with Kia by 2.7 percent. Although sales in Russia plummeted due to the war in Ukraine, they boosted their market share in Europe from 8.7 percent in 2021 to 9.4 percent last year to rank fourth after Volkswagen, Stellantis and Renault.

In America they sold 1.47 million automobiles to account for a 10.8 percent share and rank fifth after GM, Toyota, Ford and Stellantis. They also performed well in India, where they ranked second after Maruti Suzuki, with sales jumping 17 percent to 800,000 cars. 

The key to Hyundai's success was value for money. Once the butt end of jokes on late-night U.S. talk shows, it has achieved phenomenal improvements in quality, design and performance, according to one industry insider. 

Electric cars like the Ioniq 5 and EV6 contributed significantly to improving the carmakers' image as they swept global car awards last year. 

Another strength is their stable of both EVs and hybrid models. Contrary to Toyota, which focused on hybrids, and Volkswagen, which bet everything on EVs after its diesel-emissions scandal, Hyundai and Kia offer a wider range of options.

Park Jung-kyu at Hanyang University said, "Volkswagen relies on China for around 30 percent of its sales and they have plummeted, which means Hyundai could eventually rise to the No. 2 spot, but it remains to be seen how much its sales will recover in China." 

One risk factor is the rise of EV makers like Tesla. Armed with an operating profit margin of 17 percent in the third quarter of last year, Tesla slashed prices by up to 20 percent recently. That comes as a huge burden for Hyundai, which no longer enjoys subsidies in the U.S. 

The EV market will likely get more competitive as even IT companies like Apple and Xiaomi are planning to enter the fray.