Vol. 1 ('24.09)
MARKET INTELLIGENCE
NEWSLETTER
The MI Center shares major contents published by our center and related sectors in the form of newsletters. The contents below are listed on the integrated MI platform, a system that shares internal/external MI contents for Hyundai/Kia, and can be viewed by clicking the shortcut.
March. 2025
Deep Insight
Based on a cultural anthropological approach, A Study on the Competitiveness of ASEAN Market
By applying the characteristics of religion, ostentation, and customs of ASEAN countries to their cars (storage of religious symbols, ostentatious exterior design, etc.), it is necessary to differentiate them from competitors
In the previous customer researches, we identified the attributes that are important when purchasing a car and inconveniences when driving, and approached to improve them. In this research, we tried to identify the socio-cultural characteristics of Indonesia and Thailand, not the direct elements of the product, and to apply them to automobiles. The main social and cultural characteristics identified are religion (Islam and Buddhism) in Indonesia and Thailand, ostentation, residence, leisure activity, food culture, social media, customs, and customs of color. For example, in Indonesia, they carry Qur'an phrases in their cars, and in Thailand, they carry amulets written by monks in their cars. It can provide a way to store these things in the car well. ASEAN customers will then think of us as a company that understands ASEAN’s cultural identity and can be emotionally connected to our products. It can provide emotional satisfaction that is difficult for practical factors such as durability or low price to provide.
It also addressed external environmental factors related to cars, such as climate, driving conditions (road conditions, congestion), reasons for purchasing cars, and the role of cars within households. Through this analysis, we have identified the needs that ASEAN people really want from automobiles.
MI Demand Outlook(Milestone)_2H 2024 PTPE Outlook Report
Global Demand: Short-term slowdown, gradual growth with ease of inflation
In developed markets, while the U.S. change in administration is expected to improve some previously suppressed demand from electrification initiatives, Europe is anticipated to face continued low growth and medium-to-long-term stagnation. Emerging markets face heightened external uncertainties due to strengthened U.S. and European sanctions against China, limiting overall industrial demand growth. However, India is expected to see expanded medium-to-long-term demand due to robust economic growth.
Although global electrification pace is slowing compared to previous forecasts due to factors hindering BEV price parity - such as the abolition or relaxation of environmental regulations and policies, and protective tariffs on foreign products - the market size is expected to continue growing, primarily centered around China, Western Europe, and the United States.
*The report is only available in Korean.
Market Snapshot
As the Russia-Ukraine War Nears Its End, Will Global Automakers Return?
Prospects for the Return of Global Automotive Companies as Viewed by Local Media on the Russia-Ukraine War
This report compiled an overview of the automotive market outlook from Russian media for 2025, highlighting five notable aspects.
① The return of global automakers after the war is a long way off (due to the time required for approvals
and certifications)
② After the war, which global maker can return to Russia? (VW, Toyota are not among them)
③ Sales of new Russian cars will drop sharply in 2025 (due to the impact of the increased scrappage tax at
the end of last year)
④ Due to excessive inventory of Chinese vehicles and low sales volume, some Chinese companies are
likely to withdraw
⑤ KGM Ssangyong Motors re-enters Russia in the first quarter of the 2025 (bypass entry jointly with Chery)
Results of 2nd Operation of ASEAN Expert Panel Survey in the Second Half of 2024 (Indonesia, Vietnam)
Chinese Brands Tatics to Dominate EV Leadership in ASEAN
In Indonesia, BYD started selling in the latter half of the previous year and quickly rose to 8th place in sales, with a 1.7% market share, catching up to Hyundai. Three Chinese brands entered the Top 10, securing a 6.2% share. Despite a 10.5% market decline, Chinese EVs grew by 123%, increasing EV penetration to 5%. This growth paves the way for other Chinese companies. Despite the regional sales limitations of BEVs, it is expected that the market atmosphere will be maintained through the Indonesian government's policy support and the differentiated value provided by Chinese companies (excellent design, rapid application of core technologies and reasonable prices, active reflection of consumer needs through thorough market research, shortened development periods through quick decision-making, and continuous introduction of new cars to maintain sales momentum).
In Vietnam, Vinfast became the top seller by surpassing Toyota and Hyundai with increased BEV sales, rapidly changing the market. Instead of being discouraged by the rise of Chinese and Vietnamese companies, it's crucial to identify the factors driving their growth and develop strategies to respond to the market.
*The report is only available in Korean.
Quick Brief
Analysis of Consumer Satisfaction Results from U.S. Consumer Reports
Enhancing Consumer Satisfaction Through Outdoor/Off-Road Specialized Lineup and Outdoorsy Image
Rivian is appealing to high-income early adopters in the electric pickup market with its 'Urban Pickup' image, and initial owner satisfaction is high due to excellent safety, outdoor features, and driving performance. Hyundai and Kia have achieved high sales with reasonable pricing and excellent performance, but they have been rated low in consumer satisfaction due to a lack of a differentiated image and inadequate RV-specific performance. By emphasizing an outdoor/off-road specialized lineup and building an outdoorsy image in the future, we expect to see an improvement in consumer satisfaction ratings from Consumer Reports.
*The report is only available in Korean.
Impact of Vehicle Tax Increase (Indonesia)
Analysis of the Impact of Indonesia's VAT Increase and the Introduction of OPSEN(Regional Tax) on New Car sales and Brand Responses
The Indonesian government has implemented an increase in automobile tax rates (① 1 percentage point increase in value-added tax ② maximum 66% increase in vehicle tax and registration tax) from January 2025 to increase national fiscal revenue. If the tax increase is implemented according to the government's original plan, vehicle prices are expected to rise by about 6%, raising concerns about a significant decrease in new car sales. Local governments that determine the final range of increases in vehicle tax and registration tax are expected to suspend the tax increase or apply a significantly mitigated rate compared to the government's plan, due to concerns about market contraction. The central government also plans to offset some of the decline in new ICE vehicle sales through the proliferation of eco-friendly vehicles by introducing tax exemptions for hybrids in addition to existing exemptions for electric vehicles. As a result, while the possibility of a serious slump in new car sales is low, competition in eco-friendly vehicle sales is expected to intensify further, with Japanese brands expanding the launch of affordable HEVs and Chinese brands launching PHEVs at prices lower than EVs.
Product Insight
KA5 Concept Direction Proposal Study Results (Korea)
A gentle move from traditional life stages to more personalized lifestyle, Spatial Excellence, KA5
The Carnival, sporting an SUV-inspired design, has solidified its position as a dominant force in the MPV market. Last year, it ranked second in domestic sales across all vehicle models in South Korea. In US, it has made significant inroads, challenging the established dominance of Toyota and Honda, with its market share surging by 2.5 times since the launch of the KA4. However, the development of the KA5 faces some challenges. The escalating SUV trend and the rise of spacious large SUVs are poised to intensify market competition. Compounding this, South Korea's rapidly changing demographic landscape necessitates addressing the growing demand from 1-2 person households, in addition to the traditional 3/4/5 person family households. For MPVs, a vehicle category inherently designed for maximizing interior space, the strategic imperative lies in adapting to these shifting consumer categories and withstanding the competitive onslaught from large SUVs. The solution, it appears, is rooted in enhancing the core attributes of MPVs: ①maximizing spaciousness, habitability, and ease of access, ②providing practical features within a constrained price range, ③delivering high driving performance that surpasses other MPVs, and ④adopting a flexible trim strategy.
SX3 Business Competency Study (US/EU/Bazil/India/Indonesia)
Differences in Preferences and Evaluations of SX3 Interior and Exterior Design Between Advanced and Emerging Markets
There is a difference in preference for the SX3 design between advanced and emerging regions. Advanced consumers are somewhat negative about innovative design, while emerging consumers have a positive evaluation of future-oriented/differentiated design.
① Exterior: Future-oriented/straightforward/rugged style is preferred first in emerging markets, but there are likes and dislikes in advanced markets, so communication of modern design direction to the neutral layer is necessary.
② Interior: Emerging regions prefer high-tech and innovative designs, but these appear to lack functionality, necessitating enhancements in buttons, lighting, and patterns. Advanced regions appreciate a clean, modern, and open feel but express concerns about the usability of slim clusters.
③ Specifications: The overall product evaluation is positive due to the expanded space resulting from the increased specifications, and the application of various safety and new IT technology specifications.
④ Price: The price increase is large compared to the existing model, so there is some price resistance, and in regions where prices exceed the psychological resistance of consumers, it is comparable to the C-SUV.
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[Contact Us]
If you have any questions regarding this newsletter, please leave an email to the address below.
MI Planning Team Manager Song Mi-kyung (favsong@hyundai.com)
