Inster Drives 59% of Japan Sales China Still Relies on Internal Combustion Engines Localized Product Strategy Produces Mixed Results Electrification Faces a Test in China’s Recovery

Hyundai Motor Company posted sharply different results in Japan and China in the first half of this year. Sales in Japan rose 23.7% from a year earlier, while sales in China fell 20%, with EV performance emerging as the key factor behind the gap.

According to the auto industry and automobile associations in each country on the 28th, Hyundai Motor Company sold 542 vehicles in Japan in the first half of this year, up 23.7% from 438 units in the same period last year. Although the absolute sales volume remains small, the company is seen as having significance in sustaining growth as it works to establish itself in the market after reentering Japan.

By contrast, sales in China came to 47,839 units, including Genesis, down 20% from a year earlier. In terms of volume, China still far outpaces Japan, but the growth trend is the opposite.

What drove the difference between the two markets was EV sales performance. In Japan, the compact electric vehicle Hyundai Inster sold 320 units in the first half, accounting for 59.0% of Hyundai Motor Company’s total sales. With its small body and maximum driving range of 458 kilometers, it has appealed to Japan’s narrow roads, limited parking spaces and preference for compact cars.

In China, however, internal combustion engine vehicles continue to lead sales. Based on local registration data, Beijing Hyundai’s first-half sales were led by the Hyundai Elantra with 18,161 units, or 42.5% of the total, followed by the Hyundai Tucson with 9,663 units (22.6%) and the Hyundai Custo with 8,206 units (19.2%). The top three models were all centered on internal combustion engines, highlighting the gap between China’s rapidly shifting EV-focused market and Hyundai Motor Company’s product portfolio.

China’s auto market has rapidly expanded sales of new energy vehicles, including EVs and plug-in hybrids, led by local companies such as BYD Company Limited (BYD). Competition is now centered not only on price, but also on batteries, software, advanced driver-assistance systems and in-car digital experiences. Under this structure, it is becoming increasingly difficult to regain market share with a lineup centered on internal combustion engine vehicles alone.

Hyundai Motor Company is also accelerating its shift toward electrification to rebuild its China business. It is pushing to reshape its product portfolio by introducing EVs developed locally in China and unveiling a dedicated EV brand, Hyundai Ioniq V. However, with total first-half sales down 20%, analysts say more time will be needed before the strategy translates into an actual recovery in sales.

Japan presents a contrast. Hyundai Motor Company’s Inster, introduced with a focus on local consumer needs rather than market size, drove overall sales growth and confirmed the potential of a localized EV strategy. Combining EV differentiation with the small-car segment, where Japanese automakers have long been strong, appears to have worked.

Competition in Japan is expected to intensify further, however. Chinese EV makers are lining up compact EVs aimed at Japanese consumers, making it crucial whether Hyundai Motor Company can sustain the momentum it gained through the Inster. BYD is also stepping up its push in the market with vehicles such as the BYD Racco, designed with Japan’s kei car standards and consumer preferences in mind.

Ultimately, the success or failure of Hyundai Motor Company’s electrification and localization strategies is expected to determine its overseas performance in the second half of the year. An industry official said, “Now that the Inster has shown the potential of a localized EV in Japan, the key to a business rebound in China will be how quickly the company can build an EV lineup that matches local demand.”

Hyundai Ioniq V [Hyundai Motor Company] 사진 확대 Hyundai Ioniq V [Hyundai Motor Company]

This article has been translated by GripLabs Mingo AI.