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Feb. car sales continue to drop but downward pace slows

All News 17:22 March 02, 2016

SEOUL, March 2 (Yonhap) -- Car sales by five automakers in South Korea shrank for the second straight month this year in February but the downward pace slowed, raising prospects things are rebounding from a markedly weak start of the year, industry data showed Wednesday.

The combined sales of the automakers including Hyundai Motor Co. and Kia Motors Corp. came to 629,904 units last month, down from the 646,136 tallied a year earlier, according to data provided by each company.

The February figures followed a 12.8 percent fall in January.

The five also include GM Korea Co., Renault Samsung Motors Co. and Ssangyong Motor Co. The figures excluded complete knockdown kits that are assembled abroad.

"Domestic sales improved much thanks to new models hitting the market and the government's recent move to extend a temporary tax cut imposed on car purchases, "said Seo Sung-moon, an analyst at Korea Investment & Securities.

"Also, sales in overseas markets continued to post negative growth but the automakers seemed to have fared relatively well given the overall gloomy business conditions," he added.

The government ended a temporary 1.5-percentage-point excise tax cut at the end of last year. Once it expired, car sales dropped significantly in January, which promoted the government to extend the consumption-boosting scheme until June.

The data showed that their domestic sales grew 7.2 percent on-year to 110,616 units, a turnaround from January when the corresponding figures shrank 4.8 percent from a year earlier.

Most automakers, except for Renault Samsung, registered growth on domestic turf. Second-ranked Kia Motors, in particular, saw its sales here jump 10.5 percent.

In overseas markets, the five automakers continued to face setbacks as demand from emerging countries remained in the doldrums.

The data showed that their combined overseas sales in February fell 4.4 percent from a year earlier. Hyundai Motor and Kia Motors, the country's two leading carmakers, posted 8.2 percent and 1.2 percent declines, respectively.

Hyundai Motor explained in a press release that its weak overseas performance last month stemmed in part from sluggish demand in emerging markets currently going through economic instability.

The three other smaller companies fared relatively better. Most markedly, Ssangyong Motor logged a 19.6 percent spike in sales abroad, driven in part by strong popularity of its Tivoli and other sport utility vehicles in Europe.

Analysts expect that things will improve further down the road as spring is mostly regarded as a high season for car purchases, which would help boost market mood along with many new car models waiting to be launched in the months to come.

Meanwhile, the automakers' cumulative sales at home and abroad during the first two months of the year came to 1,256,173 units, down 7.9 percent from a year earlier, the data showed.


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