Hyundai Motor is facing increasing challenges on home ground, with Korean consumers looking at other options and rivals intensifying competition.

The market share of the nation’s largest automaker reached 80 percent in the early 2000s after acquiring Kia in 1999. However, its market share dropped to 68 percent last year, with the figure for Hyundai falling below 40 percent for the first time. 

“Hyundai’s market share here will further go down -- albeit slowly. It is difficult to dominate the market for long with such limited models,” Kim Hyun-cheol, a professor at Seoul National University and a former head of the Korean Academy of Motor Industry, told The Korea Herald.

Its flagship models Sonata and Avante -- once so popular that they were dubbed “cars of the Koreans” -- have also been losing popularity, with Sonata’s share declining to 6 percent in 2015 from 12 percent in 2006 and Avante’s share dropping to 7 percent from 9 percent over the same period.

Experts said the sales drop can mainly be attributed to the availability of more options from local and foreign brands.

Four German brands -- Audi, Volkswagen, BMW and Mercedes Benz -- have been enjoying double-digit sales growth in the past six years and now control a combined 15 percent of the market. Local brands -- Renault Samsung, GM Korea and SsangYong -- have also been chipping away at Hyundai’s market share, with their flagship models SM6, Spark and Tivoli faring well this year.

Hyundai Motor also seems to be having an image problem among local consumers.

Some consumers believe that Hyundai cars sold here are of lower quality but higher prices compared to the ones sold in the global market.

Such views are especially rampant on Bobaedream, one of the nation’s largest car community sites. On the website -- known to be the epicenter of negative sentiments against the automaker -- they call Hyundai’s cars “deadly weapons” because of frequent breakdowns and defaults. They also share photos and videos showing differences between Hyundai’s cars sold locally and globally.

Hyundai, which used to ignore such criticism, recently took them seriously because the growing complaints are spreading the image that Hyundai cars are problematic. In December, the company invited 30 members of the community to have candid talks with its top management including its executive vice president Kwak Jin.

Experts said although local sales account for around 15 percent of the company’s total global sales, the market is still important for the automaker because of higher margins.

“Hyundai’s premium cars -- which generate fatter margins -- sell relatively well here than in other nations where car exporters are burdened by high logistics and dealer costs,” said Chung Yong-jin, an analyst from Shinhan Investment Corp.

“Still, it won’t be easy to retain the dominant position at home because other local brands -- Renault Samsung, SsangYong and GM Korea -- are becoming more aggressive in their marketing and products,” he added.

By Shin Ji-hye (shinjh@heraldcorp.com)