Competition among automakers in Europe’s small EV market is heating up. With Hyundai Motor preparing to enter the field with its first B-segment electric vehicle, the Ioniq 3, the group chairman personally flew to the production site two weeks before mass production.
Hyundai Motor Group said on August 2 that Chairman Euisun Chung visited the company’s plant in Izmit, a port city near Istanbul, on July 30 local time, inspected the Ioniq 3 production line, and discussed local production and sales strategies with employees.
◆ The chairman stood on site two weeks before mass production
Chung examined the entire process, from body production to the trim line, and urged thorough quality checks.
He stressed, “From the start of mass production, we must put quality first and raise our market competitiveness with a level of completeness that exceeds customer expectations. In particular, safety must be recognized as the best in Europe.”
He also visited the nearby Hyundai Mobis battery system assembly (BSA) plant to check the battery production process that will be used in the Ioniq 3.
The timing of the visit is seen as meaningful. The Ioniq 3 will begin mass production in mid-August and will be gradually launched in Europe in the second half of the year. The logic behind the chairman’s on-site move appears to be that early quality will determine whether the new model can establish itself in the European market. European consumers and rating agencies are known for applying especially strict standards to safety and overall quality.
For the Turkish plant, this is its first challenge in electric vehicles. The facility, which began operations in 1997, is Hyundai’s oldest overseas production base. It has an annual production capacity of 200,000 vehicles and has built cumulative output of 3.4 million units, handling European strategic compact models such as the i20 and Bayon. A plant that has dealt only with small cars for nearly 30 years is now facing a test of its transition to electrification.
Chung also called for changes in the organization among plant employees. “Based on the achievements of the past 30 years, we must change the way we work in line with the changes of a new era so that we can grow further,” he said. He added, “We should continue strengthening competitiveness so that we can become, in every sense, the leading company in Türkiye across production, quality, and sales.” The remarks were interpreted as a call for both electrification and a structural overhaul ahead of the plant’s 30th anniversary of mass production next year.
Domestic sales in Türkiye are on an upward trend. Hyundai sold 67,120 vehicles in Türkiye last year, up 6.7 percent from a year earlier, and in the first half of this year sales also rose 2.3 percent from a year earlier to 31,630 units. Türkiye is becoming increasingly important both as a production hub and as a sales market.
◆ B-segment, which accounts for 15% of European demand, has become a battleground for electrification
The reason Hyundai is focusing on small EVs lies in the structure of the European market. The B-segment accounts for 15 percent of total vehicle demand in Europe, making it a key class. Demand for small hatchbacks remains steady as narrow urban roads, short driving distances, and a consumer preference for practicality align.
The pace of electrification is accelerating. The share of EVs within the B-segment is currently around 14 percent, but is expected to rise to 33 percent by 2030 and 65 percent by 2035.
Automakers increasingly believe that whoever secures the transition from internal combustion small cars to EVs will control the European sales landscape. This is also why major European automakers, led by Volkswagen, are rapidly expanding their small EV lineups.
In Hyundai’s European lineup, the B-segment EV slot had been empty. Although the company has broadened its lineup with the Inster, Kona Electric, Ioniq 5, Ioniq 6, and Ioniq 9, the segment with the broadest demand had remained open.
The Ioniq 3 is viewed as the model that fills that final gap. Based on the dedicated EV platform E-GMP, it uses an aero hatch design aimed at both aerodynamics and interior space. It also becomes the first European-market model to feature the next-generation infotainment system, Pleos Connect.
◆ Three-way battle among Renault, Volkswagen, and BYD, with price and safety deciding the outcome
Renault is increasing sales in key markets such as France with the retro-styled Renault 5. Volkswagen is expanding its small EV lineup with its production base in Spain and has been quickly stacking orders for its entry-level models. China’s BYD is preparing an offensive in small cars by using production at its Hungarian plant to bypass European Union tariffs.
Analysts say the deciding factors will be price, safety, and production base. In Europe’s small EV market, prices are generally set in the high-20,000-euro range, so the actual purchase price, including subsidies and option packages, is expected to determine sales volume. Rather than competing head-on with Chinese brands on low prices, many say the effective strategy is to offer superior product appeal at a price consumers can afford.
Safety is also being cited as a differentiating factor. Chung’s explicit emphasis on safety is being read as a strategy to secure the top rating in European new-car safety assessments and widen the gap with late entrants. European consumers have long shown little tolerance for compromising on safety features, even in small cars.
Local production advantages are another weapon. The Turkish plant is in the EU customs union area, reducing export burdens to Europe, and it has 30 years of accumulated small-car know-how and a supplier ecosystem. The structure in which Hyundai Mobis assembles battery systems locally is also expected to contribute to lower logistics costs and more stable supply.
Hyundai’s local trust, built through scholarship programs and disaster recovery support, is also seen as an intangible asset. In 2023, Hyundai Motor Group provided donations and relief supplies after the earthquake in Türkiye, and it awards scholarships to 400 local students every year. As a production base becomes more rooted in the local community, the company is also likely to improve employment stability and manufacturing quality.
Ripple effects are also expected for Korea’s parts industry. If Ioniq 3 sales gain traction, orders for Korean suppliers of battery cells, electronic components, and materials are likely to increase as well. Analysts say a division-of-labor system linking local EV production in Europe and Korea’s parts supply chain is emerging as the new export formula for the EV era.
If the Ioniq 3 achieves its annual target of 40,000 units next year, Hyundai will secure a foothold in Europe’s electrified mass-market segment. Its performance in the fiercely contested small-car arena is expected to serve as a barometer for Hyundai’s standing in the European market.