Abolition of new car distribution regulations in the UK... Hyundai Motor Company and Kia Consider Reorganizing Sales Strategy

With the UK, one of Europe's largest automobile markets, abolishing new car distribution regulations for the first time in 26 years, Hyundai Motor Company and Kia Motors are expected to reorganize their local sales strategies.

This measure has made it possible to improve inventory management and sales efficiency by making each dealer's pricing policy more flexible, but there are also concerns that price competition will intensify as Chinese companies expand their presence.

According to the industry on the 11th, the UK Competition and Markets Authority (CMA) recently officially abolished the 'Supply of New Cars Order 2000' that had been applied to the automobile industry.

This regulation was introduced by the British government in 2000 to improve unfair trade practices that occurred in the distribution process of new vehicles by automobile manufacturers and importers, and has been applied to manufacturers and importers' pricing policies, dealer supply conditions, and pre-registration vehicle incentives.

Since last January, the CMA has reviewed 33 market competition regulations and confirmed the abolition of 9 regulatory orders, including this order.

The CMA stated the reason for the abolition was that competition in the UK's new car market has become more intense than in the past due to the entry of new automakers and the expansion of online sales channels, and that the existing order is no longer appropriate to resolve the original problem of limiting competition.

In fact, the proportion of Chinese imported cars in UK new car registrations rose from about 1% in 2020 to 12.5% ​​in 2025, and reached close to 20% in the first half of this year.

With this measure, some restrictions on price, advertising, and pre-registered vehicles under the existing order have been removed, broadening the scope of sales policy operation by manufacturers and dealers.

Hyundai Motors and Kia have also been subject to new car supply orders through local sales corporations, but with this abolition, it is known that they are seeking new strategies to respond to the UK market as it becomes possible to operate incentives tailored to the sales situation of each dealer.

This is because it is possible to use more detailed sales strategies, such as providing additional sales incentives to regions or models with slow sales or strengthening discount support for inventory vehicles.

According to the Society of British Motor Manufacturers (SMMT), Hyundai Motor Group's UK sales from January to October this year totaled 172,615 units, including 68,645 Hyundai vehicles, 103,068 Kia units, and 902 Genesis units, accounting for 9.12% of the total market.

However, such deregulation does not directly lead to improved profitability.

If discount competition among dealers expands, vehicle average selling prices (ASPs) may fall and sales incentive costs may increase. This may also put a burden on operating profit margins.

The UK's general competition law and related competition regulations continue to apply, and the expanding offensive of Chinese automobile companies, including BYD, is also a burden.

Looking at the sales rankings by brand in the British car market last month, China's Morris Garage (MG) ranked 4th, while Jaeku (9th) and BYD (10th) were also in the top 10. Kia ranked 5th and Hyundai ranked 15th.

Looking at cumulative sales from January to October, while Kia (2nd place) increased 1.9% compared to the same period last year, MG (86,767 units, 6th place) increased 24.6%, being the only brand in the top 10 to record double-digit growth. During the same period, Hyundai Motor Company's sales decreased by 15.3%.

An industry official said, "If manufacturers and dealers' autonomy in price management expands, sales competition will become more intense. The key is whether the increased flexibility in sales strategies resulting from the abolition of regulations will lead to actual sales volume increases and improved profitability."