Hyundai Motor Company’s decision to close two internal combustion engine component plants located in South Korea reflects the automakers shift toward compliance to governmental environmental regulations. The move, affecting two plants in Ulsan with a history dating back to 1991, have been integral to the production of forged engine components. The phased closure, expected to commence in January and conclude in October, is consistent with the continued transition within the company.
Hyundai plans to source certain components from independent manufacturers, particularly engine parts needed in smaller volumes. Additionally, large-volume operations will be relocated to other plants within the company, accompanied by a portion of the staff and manufacturing equipment.
Hyundai and its luxury subsidiary Genesis have set ambitious targets in the electric vehicle (EV) market, aiming to collectively sell two million Battery Electric Vehicles (BEVs) globally by 2030. In tandem, Kia aims to contribute by selling an additional 1.6 million units, illustrating the concerted efforts within the Hyundai Motor Group to propel the adoption of electric vehicles. The group has slated the launch of 31 new BEV models by the end of the decade. This forward-looking strategy exemplifies their commitment to leading the charge towards a greener and more sustainable automotive future. But is this what consumers want?
If one looks at “Market Day Supply” (a metric showing how long a model sits on the dealership lot before it sells), insight is offered as to how sought after a model is, and to what extent the manufacturer is accurately responding to consumer demands.
As of December 2023 the $57,114 average transaction price Mustang Mach-E (the electric SUV version of Ford’s pony car) has a 358 day supply. 25,430 Mach-E were sitting on dealership lots, for nearly a year, while only 3,200 were sold in the last 45 days. Hyundai IONIQ 5 and IONIQ 6 fare better than the Mach-E with 125 and 156 days of supply respectively. Kia’s EV6 sits on lots an average of 153 days. In contrast, the $80,817 average transaction price BMW X5 internal combustion SUV has only a 29 day market supply, with only 4,198 currently available nationwide and 6,607 sold in the last 45 days.
Are other manufacturer’s EVs seeing similar market day supply figures?
Nissan’s follow-up to the LEAF now called the Ariya, has an MDS of 209 days. Audi’s Q4 e-tron, 148 days. BMW’s i7, 151 days. Cadillac’s Lyriq, 139 days. Ford’s F-150 Lightning, 124 days. Genesis’ GV60, 178 days. Porsche Taycan, 142 days.
And Internal Combustion Engine (ICE) models?
Kia’s RIO (1.6L inline-4, 120 hp) has a market supply of 21 days. Only 1,147 of the $19,091 average transaction price econocar were available last month. Kia sold 2,513 in the last 45 days.
Kia’s CARNIVAL (3.5L V6, 290 hp) has a market supply of 33 days. Only 3,428 of the $42,462 average transaction price minivan were available last month. Kia sold 7,725 in the last 45 days.
It seems the data is indicating Hyundai Motor Group should be concentrating on supplying more ICE vehicles to the market. Then why are they shutting down ICE component plants?