Toyota, Hyundai and Nissan see falling sales in global markets... Kia alone performs well

In the global automotive market, performance differences between brands have become increasingly pronounced. As of last May, major car manufacturers such as Toyota, Hyundai, and Nissan recorded a decline in sales, whereas Kia managed to maintain year-on-year growth and performed relatively well. In Europe, traditional powerhouses like the Volkswagen Group, Stellantis, and the Renault Group saw slight decreases in sales, while Ford experienced a significant double-digit drop.

Toyota's global sales in May fell by approximately 7.2% compared to the same month last year. The sharpest declines were seen in China and the Middle East. In the Chinese market, price competition from domestic electric and hybrid vehicle manufacturers meant that even Toyota's traditionally strong hybrid models failed to shine.

The decline in the Middle East is attributed to geopolitical risks and fluctuations in oil prices. Generally, rising oil prices benefit fuel-efficient hybrid vehicles. However, in an environment like the current one, where oil prices swing sharply in a short period, consumers tend to delay vehicle purchases altogether.

Hyundai also saw a drop in global sales in May, by around 7.7%. For Hyundai, the decline was more due to production cuts caused by parts supply disruptions rather than a simple slowdown in demand. The decrease was particularly pronounced in the domestic South Korean market. However, in the US market, sales of certain SUVs and electrified models held up, suggesting this is a short-term production and supply issue rather than a decline in brand competitiveness.

Nissan faces a considerable structural burden. Its global sales in May fell by more than 10%. In response, Nissan is adjusting its electric vehicle plans and pursuing cost-cutting measures to protect profitability.

In contrast, Kia saw an increase in global sales over the same period. Kia's strong performance was driven by overseas markets, where its SUV-focused lineup—including the Sportage, Seltos, and Sorento—along with its electric and hybrid models, sold in a relatively balanced manner.

The mood in the European market is also subdued. While the market appears to be growing, driven by electrified vehicles, the problem is that growth is rapidly shifting away from traditional large car manufacturers towards Chinese brands and Tesla. In particular, consumers in the lower-priced segment are less concerned with the performance and reliability that have long been the hallmarks of European cars. Consequently, in May, European sales fell by 3.0% for the Volkswagen Group, 2.3% for Stellantis, and around 1.0% for the Renault Group.

Ford's decline is more serious. Its European sales in May dropped by over 28%. This poor performance is not due to a short-term market downturn but rather a change in its product lineup. The decision to phase out familiar European passenger car models like the Fiesta, Mondeo, and Focus is the reason for the slump. Ford has attempted to shift its focus towards SUVs, commercial vehicles, and electric cars, but in the meantime, some of its traditional customer base appears to have moved to Volkswagen, Renault, Stellantis, Hyundai-Kia, and Chinese brands.

A key variable is oil prices. Rising oil prices increase consumers' running costs while also putting upward pressure on inflation and interest rates. In this scenario, more consumers delay the timing of their car purchase. Conversely, if oil prices fall rapidly, demand from consumers looking to switch to electric or hybrid vehicles could decrease. In an environment like the current one, where oil prices fluctuate wildly depending on Middle Eastern geopolitics, car manufacturers themselves find it difficult to forecast demand.

The key going forward will be how car manufacturers balance their lineups of electric vehicles, hybrids, and internal combustion engine models. While the electric vehicle market is growing, the pace varies significantly by region, making hybrids a likely realistic alternative for the time being. Combined with factors like oil prices, exchange rates, tariffs, and aggressive pricing from Chinese manufacturers, the performance gap between brands in the global automotive market is likely to widen further.