Customers look at cars at a Hyundai retailer in Tianjin. [Photo provided to China Daily]

South Korean marques are losing ground in China as local brands in the world's largest auto market are offering improved quality and a wider choice of SUV models.

In March, Hyundai Motor sold 56,026 cars in China, a 44.3 percent fall from the same month last year, while Kia Motors saw its March sales in the country plummet 68 percent to 16,006 units.

Although March was the first month that Hyundai has seen its China sales fall this year, Kia's sales have been dropping for the whole quarter. It had a 38.9 percent slump in January and a 24 percent drop in February.

China is the largest market for Hyundai and Kia, both subsidiaries of the Hyundai Motor Group, accounting for 23.5 percent and 21.5 percent, respectively, of their global sales in 2016.

South Korean newspaper Chosun Ilbo attributed Chinese customers' reaction to South Korea's decision to deploy a Terminal High-Altitude Area Defense from the United States, yet industry insiders say the incident may have had an effect, but that the real culprit of the fall lies in Chinese automakers' growing competitiveness, as evidenced by their market share of the country's passenger car market.

Statistics from the China Association of Automobile Manufacturers show that, while Hyundai's China sales in 2016 grew from the previous year, their combined market share shrank to 7.35 percent in 2016 from 7.94 percent one year earlier.

In contrast, Chinese brands' market share grew from 41.32 percent in 2015 to 43.2 percent in 2016.

A JD Power report predicted that Chinese brands will catch up with international rivals by 2018 in terms of new car quality.

Li Shufu, chairman of China's Geely Automotive Holdings, is even more confident. He told reporters in mid-March that "Chinese brands are now already as good as, if not better than, South Korean brands in terms of quality, and I believe we can catch up with Japanese brands in one or two years".

Already owning Swedish brand Volvo, Geely is planning to unveil the first cars of its own premium marque, Lynk&Co, later this month.

Great Wall Motor, China's largest SUV producer, is also to premiere models of its high-end Wey brand in April.

Great Wall sold 168,729 cars in the first two months, for 12.56 percent growth year-on-year, while Geely sold 191,629 cars in the same period, up 105 percent year-on-year.

South Korean brands' failure to come up with the right models is another problem. SUVs are China's fastest growing segment, but Hyundai or Kia were missing from the top 10 best-sellers this year, most of which are from Chinese brands.

John Zeng, managing director of LMC Automotive Consulting Shanghai, said: "Customers seeking value for money have turned to Chinese brands, which have improved greatly in the past several years."

He suggested the two South Korean brands change their positioning to create synergy.

"Kia and its sister brand Hyundai now have such similar positions and products that they are now each other's rivals. They should have created synergy with Hyundai, like Buick and Chevrolet did within General Motors."