Strategic Shift: Hyundai and Kia Boost Exports from China
Hyundai Motor and Kia have significantly increased their vehicle exports from Chinese factories over the past two years. This shift has transformed underutilized production capacity in the world’s largest auto market into export-focused hubs. According to the Hyundai Motor Group, exports from its Chinese plants reached 118,000 units in the first half of 2025. This makes China the group’s third-largest overseas export base after Turkey and India. The figure represents a substantial increase from 64,000 units in 2024 and just 23,000 in 2023, showing a strong recovery in output from facilities that were previously seen as a burden on the group’s global operations.
Hyundai’s share of these exports rose from 10,000 vehicles last year to 35,000 in the first half of 2025. The Elantra sedan was the top export model, with approximately 19,000 units shipped primarily to Middle Eastern markets such as Saudi Arabia. Another 10,000 units of Sonata taxis were exported to South Korea, marking the company’s first domestic sales of China-made vehicles. A Hyundai spokesperson noted that the turning point came in the second half of last year with Elantra exports, highlighting the importance of the Middle East and ASEAN markets in the current strategy.
Kia also saw a significant rise in exports from its Chinese facilities, shipping 83,000 units in the first half of 2025—up sharply from 23,000 units in 2023. The Sonet, a compact SUV, was the bestselling export model, with 20,000 units sold across Latin America and the Middle East.
Historically, Hyundai and Kia have focused on emerging markets like Indonesia and Brazil to support export demand. However, local consumption in these markets has developed more slowly than expected. Additionally, trade tensions, particularly U.S. tariffs that have restricted shipments from Hyundai’s Mexican plant, have made supply chain planning increasingly complex.
China, on the other hand, offers lower labor costs and well-developed production infrastructure, making it an attractive export platform. This shift has enhanced the strategic value of the companies’ remaining Chinese facilities, which had faced years of downsizing and weak utilization.
Hyundai Motor Group once operated eight plants in China—five under Hyundai and three under Kia—but following a series of divestments and shutdowns, only two plants from each brand remain operational. The group’s total production capacity has decreased from 2.7 million to roughly 1.5 million units. Output in 2024 stood at around 400,000 units, leaving capacity utilization at just 30 percent.
The pivot to exports is already improving financial performance. Beijing Hyundai, Hyundai’s Chinese joint venture, reduced its first-quarter operating loss to 42.3 billion won from 146 billion won a year earlier. Kia’s joint venture Yueda Kia returned to profitability in 2024 for the first time in eight years, recording 52.2 billion won in operating profit in the first quarter of 2025.
With exports helping to stabilize operations, Hyundai Motor Group is also renewing its push into China’s electric vehicle market, where its share has fallen below 1% from a peak of more than 10%. The company plans to launch its first EV in China later this year, followed by five eco-friendly models—including hybrids—by 2026.
Executives now argue that even modest market share gains in China could be more cost-effective than new factory investments in slower-growing third markets. For Hyundai and Kia, reclaiming just one percentage point in China may deliver greater value than greenfield expansion elsewhere.
