As Hyundai Motor Group's reliance on the United States reached 30% last year, BYD, China's leading automaker, is pursuing a contrasting strategy by expanding broadly across the globe, with Mexico—its biggest market—accounting for only 12%. Hyundai Motor Group once grew into a global player on the back of the U.S. market, but now its U.S. concentration appears to be holding it back as it becomes exposed to various geopolitical and political risks. Attention is on whether Hyundai Motor Group can find a new "land of opportunity" as BYD secures a lead in fast-growing emerging markets.
According to BYD on the 10th, its largest market outside China last year was Mexico, where it sold 130,500 vehicles. After entering Mexico at the end of 2023, it sold about 40,000 units in 2024, and last year's sales were more than triple that. Even so, reliance on Mexico was only 12.4% of total overseas sales of 1,049,600 units. The No. 2 market, Brazil, was also 112,900 units, just 10.8%.
While increasing overseas sales, BYD is diversifying the countries it enters to prevent concentration in specific regions. BYD's overseas sales growth rate last year was 145% from a year earlier. This year's export target is 1.5 million units, up 43%. A BYD official said, "BYD is currently selling new energy vehicles (electric and hybrid vehicles) in 119 countries and regions," and noted, "Starting from No. 3 by sales volume, there are so many applicable countries that tallying becomes difficult."
Unlike BYD, Hyundai Motor Group is pursuing a strategy of selection and concentration in overseas sales. Hyundai Motor's largest market is by far the United States, where it sold 1,007,000 vehicles last year. That is 29.4% of sales outside Korea (3,425,000 units). Kia's U.S. reliance reaches 36.8%. Last year, it sold a total of 2,377,000 units outside Korea, of which 874,000 were sold in the United States. The number of countries entered is also just a quarter of BYD's, at 27 for Hyundai Motor and 23 for Kia.
Hyundai Motor Group's U.S. focus is continuing this year. Hyundai Motor and Kia both posted their highest-ever first-quarter sales in the U.S. market in the first quarter. Hyundai Motor President José Muñoz said at last month's regular shareholders' meeting, "We will drive aggressive growth in North America, the most profitable market," and added, "We will sequentially launch 36 new models in North America by 2030."
Hyundai Motor Group was able to rise to become a global player thanks to its U.S.-centric strategy. It first entered the U.S. market in 1986 with the Excel, touted as "the most affordable car." It created a sensation by selling 168,000 units in its first year, but quality and service failed to keep pace with the rapid sales growth. After struggling for a while, it moved to revamp its image in 1999 with the then-unprecedented "10-year/100,000-mile warranty," and today it is regarded as offering quality at a reasonable price. When sales in China fell from around 1 million units a year to roughly 150,000 amid the THAAD dispute in 2017, the U.S. market helped it endure. As of last year, Hyundai Motor and Kia's combined U.S. market share rose to 11.3%.
But excessive reliance on a single country is inevitably vulnerable to geopolitical and political risks. This has intensified since last year. U.S. President Donald Trump, immediately after returning to office, imposed a 25% tariff on imported cars, dealing Hyundai Motor and Kia a financial blow of 7.2 trillion won last year alone. Yun Hyuk-jin, an analyst at SK Securities, said, "We estimate the U.S. tariff impact (on Hyundai Motor in the first quarter) at 1.1 trillion won," and added, "We estimate that operating profit (in the first quarter) failed to keep up with revenue growth due to an EV slowdown and increased incentives."
It is also a painful reality that while Hyundai Motor Group focused on the United States, it lost many emerging markets to China. The U.S. auto market has already entered a mature stage, but the "Global South" auto markets (emerging and developing countries mainly in the Southern Hemisphere), which China has recently focused on, are growing explosively. BYD's total sales of 4,602,436 units last year, surpassing Hyundai Motor (4,138,000 units), stem from this strategic difference.
Hyundai Motor Group is also putting weight behind a market diversification strategy. In a recent CEO letter to shareholders, Muñoz said, "In the Chinese market, under the strategy of 'in China, for China, to the world,' we will launch 20 new models over the next five years, and in the Indian market, we plan to roll out 26 new models based on a $5 billion investment by 2030." This target is triple the number of new models Hyundai Motor launched in the two markets over the past five years (12 in China and 6 in India). Through this, the company plans to raise sales in India (832,500 units) and China (444,000 units) to a combined 1,276,500 units by 2030.
However, it remains to be seen whether the goals will be achieved. Hyundai Motor's China subsidiary sold only 50,378 units in the first quarter of this year. The compact SUV Tucson L sold 4,883 units, up 619.6% from a year earlier, but overall market share remains in the 1% range. In India as well, last year's sales (572,000 units) fell 5.5% from the previous year, with market share slipping from No. 2 to No. 4.