Hua Xue, chief executive officer of cheshi.com.cn, a Beijing-based website
conducting on-line car sales nationwide, said: "The launch prices of the Accent
were higher than customers' expectations. It couldn't help but slash the prices
in order to deal with competition from rivals, despite having made this
promise."
The Accent competes in a segment where customers are very sensitive about
prices, going head-to-head with models such as Volkswagen's Polo, the Chevrolet
Lova and the Honda Fit.
Hua added that Beijing Hyundai also had to cut the prices in an effort to
achieve its ambitious 2006 sales target.
The company announced at the beginning of this year that it aimed to sell
300,000 vehicles in 2006, up from last year's 230,000 units.
In the first seven months of 2006, Beijing Hyundai's sales grew 19 per cent
year-on-year to 157,100 units, ranking fifth in China's passenger vehicle
market.
It sold 13,400 Accents by the end of July, a figure that fell far short of
Beijing Hyundai's expectations, according to analysts.
The company, which has facilities in Shunyi District, also produces the
Elantra compact sedan, the Sonata NF mid-sized sedan and Tucson sport utility
vehicles.
Jia Xinguang, from the China Association of Automobile Manufacturers, said:
"The lawsuit will tarnish Beijing Hyundai's reputation. It is likely to have a
negative impact on its sales for at least one year."
"This is a major lesson other automakers should learn," Jia said.
Established in 2002, Beijing Hyundai, plans to double its production capacity
with the construction of a new factory capable of turning out 300,000 vehicles a
year
It plans to boost annual sales to more than 600,000 vehicles by
2010.
(For more biz stories, please visit Industry Updates)
