Sales of the new large Sports Utility Vehicle (SUV) Palisade, launched by Hyundai Motor Company this year, have fallen short of initial expectations. The Palisade was identified as a key internal combustion vehicle to lead Hyundai Motor Company's sales performance amid a recent slump in electric vehicle sales, but its performance so far has lagged behind that of the Kia Sorento, a vehicle of the same class launched five years ago.
On the 6th, Hyundai Motor Company and Kia reported that 7,682 units of the Palisade were sold in the domestic market last month. This figure falls short of the 7,734 units sold of the Sorento during the same period. The cumulative sales from January to May this year also show the Sorento at 43,206 units and the Palisade at 25,327 units.
The new Palisade is a completely redesigned second-generation model, launched in over six years. It is available in gasoline and hybrid models, with a 9-seat version added to the existing 7-seat model. The hybrid model is the first of its kind for Hyundai and features the next-generation 2.5 turbo system, achieving a maximum output of 334 horsepower and a driving range of over 1,000 kilometers on a single tank.
The new vehicles that Hyundai Motor Company is unveiling this year include not only the Palisade but also the large electric SUV Ioniq 9, the hydrogen vehicle second-generation Nexo, and the partially revamped Ioniq 6. Despite being a limited market size large SUV, expectations were high that the Palisade, the only new internal combustion vehicle launched by Hyundai this year, would boost domestic sales performance. During the launch event for the new Palisade held on Jan. 15, Hyundai Motor Company President Lee Dong-seock and Metal Workers' Union Hyundai Motor Branch President Moon Yong-moon appeared on stage together.
In the finished vehicle industry, the main reason cited for the new Palisade's sales falling short of the Sorento, which was launched as the fourth-generation model in 2020, is its high price.
The price of the gasoline 2.5 turbo 7-seat model of the new Palisade ranges from 44.47 million won to 57.06 million won. This price is about 8 million to 14 million won more expensive compared to the Sorento, which is priced between 36.05 million won and 42.91 million won for the same gasoline 2.5 turbo model. The price of the 7-seat hybrid model of the Palisade also stands at 50.68 million to 63.26 million won, exceeding that of the Sorento hybrid by more than 10 million won.
Hyundai Motor Company appears to be in a state of embarrassment as the sales performance of the new Palisade has fallen short of initial expectations. José Muñoz, who was appointed as the first foreign CEO of Hyundai Motor Company this year, reportedly summoned Vice President Jung Yu-seok of the Domestic Business Division recently, issuing a special order that the Palisade must outperform the Sorento in sales competition. Consequently, Hyundai's regional headquarters and sales networks nationwide have been focusing on promoting the Palisade recently.
Some sales organizations within Hyundai Motor Company are reported to have engaged in advance deliveries of the Palisade to increase sales figures. Advance delivery is a practice where vehicles not contracted are delivered first to be stored and recorded as sold to boost sales figures. Hyundai is also offering about 4 million won in discounts for vehicles displayed at dealerships.
A Hyundai Motor Company representative said, "With the possibility of decreased overseas sales due to the United States imposing tariffs on automobiles, there is a growing sense of crisis that the sluggish performance of new vehicles will worsen domestic sales performance."