The rise of Chinese electric vehicles, led by Tesla and BYD, is shaking Hyundai Motor Group's position in its home market of South Korea. With sales slowing both domestically and internationally, the company faces additional challenges as labor strikes escalate, raising concerns about its performance in the second half of the year.
According to an analysis by Kaizyu Data Research Institute of data from the Ministry of Land, Infrastructure and Transport, Hyundai Motor Group's three brands (Hyundai, Kia, and Genesis) registered a total of 534,654 new passenger cars in the first half of 2026 (January to June), a decrease of approximately 4.8% compared to the same period last year (561,875 units).
During this period, Kia was the only brand to show growth, with 268,868 new registrations. In contrast, Hyundai and Genesis saw declines of 8.0% and 24.0%, with 217,962 and 47,824 new registrations, respectively.
Hyundai's struggles in its domestic market can be largely attributed to the strong performance of Chinese electric vehicles like Tesla and BYD. These brands have capitalized on the shift from internal combustion engines to electric vehicles, attracting domestic demand with competitive pricing.
The combined increase in sales from Tesla and BYD in the first half of the year exceeded the overall growth in the imported passenger car market. Tesla saw an increase of 36,925 units (192.1%), while BYD's sales surged by 10,338 units (773.2%). Together, their growth accounted for 47,263 units, surpassing the total increase of 46,250 units in the imported passenger car market during the same period.
Tesla has maintained its position as the top seller in the domestic imported car market since February, selling 11,130 units in March alone, effectively changing the benchmark for the '10,000 Club' from annual to monthly sales. BYD is also rapidly expanding its presence with affordable models like the Dolphin and Sea Lion, increasing its monthly sales from 1,347 units in January to 4,652 units last month.
The situation is compounded by Hyundai's struggles in international markets. From January to May, cumulative sales from overseas factories totaled 909,400 units, down nearly 40,000 units from the same period last year (947,315 units). Notably, significant declines were observed in key markets such as Turkey, China, the Czech Republic, and Indonesia, with decreases ranging from 6.5% to 36.0%.
Industry experts believe that defending performance in the second half of the year will be challenging. Hyundai's labor union has entered a strike phase following a breakdown in wage and collective bargaining negotiations. While currently in a partial strike, there is a significant possibility of escalation to a full strike, which would inevitably disrupt the production of new models set to launch in the second half of the year. Hyundai is expected to begin sales of the eighth-generation Avante, a complete redesign after six years, as early as next month, along with the introduction of a new Tucson.
An industry insider noted, "Tesla has recently raised prices, and BYD has been excluded from government subsidy eligibility, which adds to the uncertainty. If Hyundai's strikes continue for an extended period, the impact on new model launches will be unavoidable, and we will need to monitor the recovery of global sales closely."
* This article has been translated by AI.
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