French Industry Minister Arnaud Montebourg said that Hyundai and Kia’s dumping tactic harms domestic automakers such as Renault and PSA/Peugeot-Citroen, whose sales and market share in France have declined. Montebourg is asking the European Commission to probe whether Hyundai Group’s strategy in France and Europe is legal according to the terms of a trade agreement between the European Union and South Korea.
Montebourg said that the prices of Hyundai Group’s models are below market value, unfairly increasing their market share in France and in Europe. France is the first member in the EU to submit a petition to the European Commission to determine if the practices of a South Korean company fall within the terms of the trade agreement.
During a French Socialist Party meeting last Friday, Montebourg said that Hyundai and Kia’s dumping tactic is “unacceptable” and is tantamount to unfair competition against French carmakers. The sales of PSA and Renault have fallen this year in France while Hyundai and Kia have achieved double-digit growth in the market.
French auto association CCFA said that Hyundai Group sales in France rose 30% to 36,328 units from January through July. Meanwhile, PSA’s sales dropped by 20% to 367,542 units and Renault’s volume decreased by 18% to 272,722 units during the same period.
A Hyundai Europe spokesman denied the accusation of the French minister, saying that the average price discount carmakers in the EU gave during the first half of 2012 was 2,137 euros. But then, Hyundai's price incentive was 88% of that average, or 1,870 euros. [source: Automotive News - sub. required]