South Korean carmakers Hyundai Motor Co. and Kia Motors Corp. have been outsold by their main local rival in the Chinese market and may further lose their standing going forward, industry watchers said Monday.

Market data showed that Geely overtook Hyundai and Kia in terms of cars sold in February of last year due to structural weaknesses and the diplomatic row caused by the deployment of the US Terminal High Altitude Area Defense anti-missile defense system in South Korea.

Cars made by the two largest South Korean automakers, which boasted six times the sales of Geely in the world's single largest car market in mid-2014, started trailing their local competitor.

"The average price of Hyundai and Kia cars is roughly twice that of its Chinese rival, and the THAAD controversy hurt the two carmakers," a source said.

He said data showed that from January through November of last year, Geely sold 1.08 million units. This is the highest number for any Chinese automaker, not counting tieups like SAIC General Motors Corp. and SAIC Volkswagen.

In the same 11-month period, Beijing Hyundai Motor Co. and Dongfeng Yueda Kia Automobile Co. managed to sell 970,000 vehicles combined. This represents a 38 percent drop in sales this year.

Analysts said the drop in sales has been affected by THAAD, which triggered a boycott of South Korean products in the country.

They said cheaper prices of Chinese cars are also eating into numbers for Hyundai and Kia.

"A Geely made 1,600 CC car costs 45 percent less than a comparable model by Hyundai and Kia," industry data released by Hana Financial Investment Co. showed. It added rapid catching up in quality by Geely, through the acquisition of Volvo, is also hurting sales.

Hana Financial then said that Hyundai's and Kia's sales may edge up at 1 percent levels in 2019. (Yonhap)