UK scraps new-car distribution rules after 26 years; Hyundai and Kia rethink sales strategies

[Financial News] Britain’s repeal of new-car distribution regulations after 26 years is expected to bring changes to Hyundai Motor Company and Kia Corporation’s local sales strategies. Greater flexibility in dealer-specific discounts and sales incentives has created favorable conditions for inventory management and sales growth, but with Chinese automakers stepping up their push into the market, securing profitability has emerged as a key challenge.
According to industry sources on the 11th, the UK Competition and Markets Authority (CMA) recently officially repealed the Supply of New Cars Order 2000, which had regulated the distribution of new cars by automakers and importers. The order was introduced in 2000 to improve unfair trading practices, and its repeal comes 26 years later.
The CMA determined that the need for the existing regulations had diminished as the competitive landscape changed, with new automakers entering the market and online sales channels expanding. After reviewing 33 market competition regulations starting in January this year, it confirmed the repeal of nine, including the order.
The move allows automakers and dealers to adopt more flexible sales policies, freed from some of the restrictions under the order concerning pricing, advertising and pre-registered vehicles. However, relevant rules, including general competition law, will remain in effect.
Hyundai Motor Company and Kia Corporation are also expected to overhaul their local sales strategies, for example by varying incentives according to regional sales performance and inventory levels or expanding discount support. Analysts say they could strengthen their ability to respond to the market by focusing support on underperforming models and improving inventory turnover.
According to the Society of Motor Manufacturers and Traders (SMMT), Hyundai Motor Group sold a total of 172,615 new vehicles in the UK from January to October this year: 68,645 by Hyundai Motor Company, 103,068 by Kia Corporation and 902 by GENESIS. Its market share was 9.12%.
The rapid growth of Chinese automakers is, however, a challenge. The share of Chinese-made imported cars among new vehicle registrations in the UK rose from about 1% in 2020 to 12.5% last year, and came close to 20% in the first half of this year.
In last month’s brand sales rankings, Chinese-owned MG placed fourth, Jaecoo ninth and BYD tenth. Kia ranked fifth and Hyundai Motor Company fifteenth. From January to October this year, Kia’s sales rose 1.9% year on year, while Hyundai Motor Company’s fell 15.3%. Over the same period, MG sold 86,767 vehicles, up 24.6%.
Deregulation could instead fuel discount competition. Expanded dealer sales incentives could erode profitability by lowering average selling prices (ASP) and increasing marketing costs.
An industry source said, “As automakers and dealers gain greater autonomy in setting prices, sales competition will become even fiercer,” adding, “The key is whether the greater flexibility in sales strategies resulting from the repeal of the regulations leads to actual sales growth and improved profitability.”

[email protected] Kim Dong-ho Reporter