Competition is expected to intensify in the South Korean hybrid vehicle market as two global automakers are set to clash with their new subcompact models that are already drawing favorable responses from customers, market watchers said Wednesday.
With Hyundai Motor Co. and Toyota Motor Corp. claiming to guarantee better functions and improved driving performance than existing models, fuel efficiency remains a major factor that determines the winner in the hybrid market in the years to come.
Hyundai Motor, South Korea's leading automaker, unveiled the Ioniq in mid-January, saying it is the first dedicated hybrid model manufactured via its own production platform as opposed to others based on existing combustion engine models. Its official sales started in mid-January.
Dubbed as the "Prius killer," Hyundai Motor's Ioniq apparently set its sights on the world’s most popular hybrid model in all possible aspects and, among other things, the most powerful selling point should be its fuel efficiency.
Its new Kappa 1.6 liter GDi engine and a high-efficiency permanent magnet motor coupled with a six-speed double clutch transmission developed for hybrid models allows the Ioniq to run up to 22.4 kmpl, which is better than the third generation of the Prius, company officials said.
Hyundai Motor also claims that no less effort has been made to assure that the Ioniq does not lag behind other rivals including non-hybrid models in terms of driving performance and convenience for passengers.
Hyundai Motor publicly singled out the Prius as its main rival, throwing down its gauntlet to the Japanese model and showing confidence that it will lead the hybrid market eventually.
"We see the Prius as our main rival for the Ioniq," Ryu Chang-seng, a high-ranking official of Hyundai Motor in charge of marketing strategy, said during a launch event on Jan. 14. "It will lead the global market despite its belated launch compared to the Prius."
Hyundai Motor said that it has received around 1,000 preorders, and the major customers for the new model are those in their 20s and 30s. It plans to sell 30,000 units globally this year including 15,000 units in Korea alone.
The Ioniq is the beginning of what will be Hyundai Motor's years-long project to put out 26 environmentally friendly vehicles by 2020 and raise their sales proportion to 10 percent from the current 2 percent. For this year alone, the electric vehicle and plug-in electric vehicle versions of the Ioniq will hit the market.
Against this backdrop, Toyota also plans to launch the fourth-generation of the Prius in March in Korea, reportedly armed with better fuel efficiency and enhanced functions than its previous models.
Given its track record, the latecomer Ioniq is no match for the Prius, which has been the leader in the hybrid market since its launch in 1997. Its cumulative global sales stand at around 3.5 million.
In the U.S., in particular, the sales of the Prius along with its family lineups such as the Liftback, C and V models came to over 180,000 units last year. The figure was down 7 percent from 2014 due to the overall market slump, but its market share rose
from 43 percent to 47 percent according to industry data.
The latest version of the Prius reportedly has a longer wheelbase and almost the same level of fuel efficiency as the Ioniq.
It is arguable which one is better at a time when detailed comparable figures are not available. Both have their own pros and cons that cannot be ignored.
Some advantages of the Ioniq are its much cheaper prices and relatively easy access to service centers held by the homegrown auto giant compared to foreign brands. It would be hard to dismiss the fact that the Prius has been a decades-long market leader.
Even if customers have different tastes in design and function, many market experts seem to agree that at the end of the day, fuel efficiency will be a major determining factor for customers to buy which hybrid models.
"While the Ioniq seems to outperform in terms of price, driving fun and customer service, but after all, fuel efficiency will emerge as a major point," a market expert said on the condition of anonymity. "Who is going to win in the market will become clearer when officially approved fuel efficiency numbers for the two models are available."
Whoever wins the race, it is hoped that the heated competition between the two major carmakers in South Korea could end up expanding the overall market "pie" here which has been growing at a steady pace in recent years.
"We welcome the launch of the Ioniq. Especially in a market like Korea where customers are sensitive to oil prices, such an auto giant as Hyundai Motor has to beef up efforts to generate a market," a Toyota Korea official said. "We expect that the latest hybrid model of Hyundai Motor will expand the pie."
In 2015, sales of hybrid vehicles in South Korea grew 7 percent on-year to an all-time high of 38,978 units, which was much higher than the mere 1,070 units tallied seven years ago, according to industry data. (Yonhap)