THE STAR – The last time Hyundai Motor Co sold a car in Japan was in 2009, when it pulled out after years of dismal sales. Now, South Korea’s top automaker is back, but with a twist: it’s only going to sell electric vehicles (EVs), and only online.
“We have prepared a lot, not to repeat the same mistake,” Hyundai’s Chief Executive Officer Jaehoon Chang said in an interview. “We should know customers, we should know the market, with the right product and the right brand.”
Chang, 57, is counting on the push back into Japan – to be formally unveiled in Tokyo next week – to reach his goal of selling 1.7 million EVs globally in 2026, including the carmaker’s Kia and Genesis brands, a target that was recently increased from one million.
For incumbents and new entrants, the twin forces of electrification and automation are fuelling bolder moves into fresh markets that, up until now, might have seemed impenetrable.
While Hyundai hasn’t disclosed how many EVs it aims to sell in Japan, it’s definitely more than the 15,000 gasoline-engine cars sold during its prior foray. “We’ve experienced huge growth on the EV side in South Korea, and we’re expecting the same thing will happen even faster in Japan,” Chang said.
Leading Hyundai’s charge back into Japan’s hyper-competitive automobile market is the Ioniq 5, a compact sports utility vehicle (SUV) that debuted last year to wide acclaim. The vehicle will go head-to-head against two other battery-based EVs being rolled out this year from Japan’s top two automakers: Toyota Motor Corp’s bZ4X and Nissan Motor Co’s Ariya.
Even though EV uptake in Japan remains miniscule, with the bulk of the 8,600-plus registrations last year comprised of imported Tesla Inc models, there are signs the archipelago might be on the cusp of catching up with the United States (US), Europe and China.
One out of every four potential car buyers is considering an EV, a recent survey showed, while charging points are popping up around the country, even in new condominium projects.
As far as Hyundai’s CEO is concerned, the starting line is the same for every carmaker when it comes to EVs in Japan, where 4.5 million vehicles were sold last year.
That gives Hyundai a chance to redefine itself as an EV manufacturer under the Ioniq marque, said Chang, who has first-hand knowledge of the market, having lived in Japan twice in the past.
If the strategy sounds familiar, that’s because Samsung Electronics Co used a similar tactic to win over Japanese consumers with its Galaxy smartphone. During the years when Hyundai was absent, Samsung and LG Electronics Inc proved that it’s possible for South Korean companies to break into, and even thrive, in the notoriously fickle market.
“We know this market is very sophisticated and the Japanese customer, they have higher standards for everything because they know cars,” Chang said. “What I learned from Samsung and LG is that it’s about the brand and the product strategy.”
Even so, tensions between the countries – rooted in Japan’s colonial rule over the Korean Peninsula – can flare up from time to time.
Japan imposed a curb on exports of key materials needed for memory chips in 2019 during a diplomatic row. The following year, Japanese automakers saw their sales plummet in South Korea. This week saw a feud over a 400-year-old gold mine.
Still, in a country where EVs haven’t managed to reach a market share of even one per cent, it’s difficult to gauge whether Japanese consumers will embrace the Ioniq 5, with its retro-futuristic design.
Although it’s a compact SUV, the vehicle isn’t exactly small – a challenge for the country’s narrow roads and tight parking spots, one of the reasons cited for Hyundai’s gasoline-engine cars failing to gain traction more than a decade ago.