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Car sales edge down in March hurt by weak overseas demand

All News 16:24 April 01, 2016

SEOUL, April 1 (Yonhap) -- Sales by five automakers in South Korea dropped 0.9 percent in March from a year earlier as overseas demand was hurt by slowing global growth and mounting market uncertainty, industry data showed Friday.

The combined sales of the automakers, including Hyundai Motor Co. and Kia Motors Corp., came to 794,505 units last month, down from 802,062 units a year earlier, according to data provided by each company.

Their domestic sales rose 17 percent, while sales abroad dropped 4.3 percent, the data showed. The five also include GM Korea Co., Renault Samsung Motors Co. and Ssangyong Motor Co., and the figures excluded complete knockdown kits that are assembled abroad.

"An extended tax cut on car purchases helped boost sales here, but the global economic slowdown, subdued oil prices and not that many new models launched overseas hurt their exports," said Seo Sung-moon, an analyst at Korea Investment & Securities.

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, which promoted the government to extend the consumption-boosting scheme until June.

By company, market leader Hyundai Motor saw its sales drop 0.9 percent, while its smaller affiliate and second-ranked Kia Motors posted a 3 percent decline in vehicles sold at home and abroad.

Hyundai Motor attributed its slump to the slowing economic growth in emerging markets, rising currency-related uncertainty and intensifying competition.

The three smaller automakers, however, fared relatively better, with their major popular models leading their sales here in each segment.

Third-ranked GM Korea registered a 3.4 percent growth in total sales, led by a 27.6 percent spike in domestic sales. Behind the stellar figure is the Spark city car, sales of which hit an all-time high of 9,175 units since its debut in Korea.

On the home turf, Renault Samsung also basked in customers' keen interest in its newly launched SM6 sedan. It sold 6,751 units of the SM6, leading its 70.4 percent spike in its total domestic sales.

The Tivoli, the popular crossover SUV model of Ssangyong Motor, propped up the business of the smallest carmaker owned by India's auto giant Mahindra & Mahindra. Tivoli sales here and abroad jumped 69.7 percent and 37.1 percent from a year earlier, the data showed.

Analysts expect that things for those automakers will improve in the months to come as they will likely bring their new models to the global stage, which could lead to a rebound in sales.

"With more new models to be launched overseas and given the so-called base effect from the anemic performance seen from the second quarter of last year, automakers will likely see a rebound going forward," Seo said.

Meanwhile, the five automakers' first-quarter cumulative sales at home and abroad totaled 2.05 million units, down 5.3 percent from the same period a year earlier, the data showed.


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