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S. Korea's March car sales fall 7.7 pct on weak demand, lack of tax incentives

All News 19:47 April 03, 2017

By Choi Kyong-ae

SEOUL, April 3 (Yonhap) -- The total number of vehicles sold by South Korea's five automakers fell 7.7 percent on-year in March mainly due to weak overseas demand, the companies said Monday.

The five carmakers -- Hyundai Motor Co., Kia Motors Corp., GM Korea Co., SsangYong Motor Co. and Renault Samsung Motors Corp. -- sold a combined 733,274 vehicles last month, down from 794,868 units a year earlier, according to monthly sales data calculations.

The decline was mainly attributed to lower demand from emerging markets such as China and Russia and a lack of tax benefits, analysts and industry watchers said.

"In particular, shipments in China backtracked as the row over the deployment of an advanced U.S. missile defense system in South Korea adversely affected consumer sentiment in the world's No. 2 economy," said Kim Tae-nyen, executive managing director of the Korea Automobile Manufacturers Association (KAMA).

Moreover, new car buyers didn't benefit from the 30 percent reduction in individual consumption tax which buoyed vehicle sales during the February-June period last year, he said.

Domestic sales edged down 1.98 percent to 145,903 units last month from the previous month's 587,371 units. Overseas sales plunged 9.08 percent to 587,371 from 646,020 during the same period, calculations showed.

Hyundai Motor sold a total of 405,929 autos last month, down 6.3 percent from 433,171 units. Its 37 percent-owned affiliate Kia Motors sold a combined 238,222 units, down 11 percent from 268,306 units during the same period, the companies said.

"The country's two major carmakers failed to come up with robust sales figures last month as they didn't perform well in the most important U.S. market," Suh Sung-moon, an analyst at Korea Investment & Securities Co., said. He pointed out there is a strong demand for large and premium SUVs, but the two companies lack such models in their lineup.

Hyundai and Kia, which together form the world's fifth-largest carmaker, expect a series of new vehicles -- the Stinger sports car of Kia, the all-new Kona SUV and the G70 luxury sedan of Hyundai -- will boost their overall sales in the coming months.

Kia's Stinger sports car (Yonhap file photo)
Hyundai's Kona SUV's teaser image (Yonhap file photo)

Suh expected Hyundai to launch the Stinger in May, the Kona SUV in June and the G70 in July in the 1.8 million domestic market, and will seek a "turnaround" in their sales. The market size includes local sales of imports.

The five carmakers domestically sold nearly 1.6 million vehicles last year, but this year they will probably sell less, he said.

Among the three smaller players, Renault Samsung Motors stood out by posting robust sales in March. SsangYong Motor's sales remained little changed last month from a year earlier on steady sales of the Tivoli SUV. GM Korea suffered declines in domestic sales and exports primarily because it lacks new models, their sales data showed.

Renault Samsung's overall sales rose 4.3 percent year-on-year to 25,281 units last month on strong demand for the QM6 SUV and the SM6 sedan. SsangYong's sales were 12,992 units, little changed from 13,010 a year earlier. GM Korea's sales plunged 12 percent to 14,778, the data said.

To beef up its SUV-focused lineup, SsangYong, which swung to a profit in 2016 for the first time in nine years, said last week that it will launch the G4 Rexton large-size SUV this year and increase exports of its major SUV products such as the Korando C SUV.

"The country's vehicle exports for this year will remain at a similar level vis-a-vis last year's shipments in terms of value," Kim at KAMA said.

The five carmakers exported about 3 million vehicles valued at US$4.06 million last year from their production facilities in South Korea, he said.

In this photo, taken on March 30, 2017, Mahindra & Mahindra Ltd. Executive Chairman Anand Mahindra (L) and its South Korean unit SsangYong Motor Co. CEO Choi Johng-sik (R) pose with SsangYong's new G4 Rexton SUV during the Seoul Motor Show press day held at KINTEX exhibition hall near Seoul. (Yonhap)
SsangYong Motor's Tivoli compact SUV (Yonhap file photo)

In the January-March period, domestic sales by the five automakers rose 1.6 percent year-on-year to 371,725 units from 365,772 a year earlier. Their overseas sales fell 3.8 percent to 1.62 million from 1.69 million, the latest data showed.

Overseas sales data released by Hyundai and Kia include exports of vehicles made in their domestic and overseas plants. But overseas sales by GM Korea, Renault Samsung and SsangYong Motor mean exports of vehicles produced in their South Korean factories.


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