An engineer holds the steering wheel inside a Hyundai Motor Co. Nexo autonomous fuel cell electric vehicle during a test drive in Pyeongchang, Gangwon Province, South Korea. (Photographer: SeongJoon Cho/Bloomberg)

`Made for China' Is Hyundai's New Mantra to Lure Back Car Buyers

(Bloomberg) -- Hyundai Motor Co.’s designers are working overtime to add zing and connected features to its cars. The goal: woo young consumers to reverse a sales plunge in the world’s biggest auto market.

The company is expanding a 25-member China design group with an aim to double its size and bring it on par with teams in Europe and California, said Simon Loasby, who runs the team. South Korea’s biggest carmaker posted a 31 percent drop in China sales last year after a political dispute and the lack of new, high-tech models kept buyers away from its showrooms.

“We have to build more cool cars to excite current generations in China,” Loasby, 50, said in an interview in Beijing. “We need to move on and be more brave -- to try to create each new car as an icon, to create that ‘wow’ where somebody would want to run their hand over the surface.”

With about half of China’s 1.4 billion people aged below 40, fitting the vehicles with online features is crucial for Hyundai’s push to regain ground. What works in China increasingly has the potential to appeal elsewhere, too, thanks to the country’s urban young consumers who are setting global trends in tech-connected lifestyle.

Hyundai is trying to reshape its image after its market share was eroded by German and Japanese brands as well as local Chinese contenders. The automaker was late to react to the shift in consumer preferences away from sedans to larger and more expansive SUVs and was caught between cheaper Chinese brands and global luxury marques introducing entry-level models.

`Made for China' Is Hyundai's New Mantra to Lure Back Car Buyers

At the Beijing auto show late last month, Hyundai showed an ix35 sport utility vehicle with a 9.6-inch (24-centimeter) screen that lets the user stream music and use online services popular among younger consumers, such as Alipay and Tencent Holdings Ltd.’s WeChat. The vehicle’s infotainment system also includes Baidu Inc.’s connectivity services such as navigation, and it allows the driver to reserve a parking spot.

“A big question is the virtual economy -- how does that affect our customers? What do they want out of that from a brand like ours?” Loasby said at the Beijing event. “I torture our guys and myself on this.”

Hyundai also displayed a new sports sedan, Lafesta, and a compact SUV, Encino. Down the road, the automaker is planning to release more China-specific models, and bring the luxury brand Genesis to the world’s largest market.

"China is changing so fast. We are really putting a lot of attention on the Chinese market,” Peter Schreyer, chief of design at Hyundai and affiliate brand Kia Motors, said at the Beijing event. "Our attitude is completely different now. If there’s something the market wants, we learn very closely and we try to do our very best to make people happy here.”

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