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Auto sales dip 36 pct in May amid pandemic

Economy 17:54 June 01, 2020

By Choi Kyong-ae

SEOUL, June 1 (Yonhap) -- South Korea's vehicle sales plunged 36 percent last month from a year earlier as the new coronavirus outbreak continued to dent demand for cars, with overseas sales hit particularly hard, industry data showed Monday.

The country's five carmakers -- Hyundai Motor Co., Kia Motors Corp., GM Korea Co., Renault Samsung Motors Corp. and SsangYong Motor Co. -- sold a combined 423,416 vehicles in May, down from 665,136 units a year ago, according to data from the companies.

Hyundai Motor and Kia Motors, the country's two biggest carmakers, suspended operations of their major overseas plants until late May and parent firms of the three other carmakers reduced production to control inventories amid the COVID-19 pandemic.

This photos show logos of the country's five carmakers: (clockwise from top L) Hyundai Motor, Kia Motors, SsangYong Motor, GM Korea and Renault Samsung Motors. (Yonhap)

Hyundai and Kia restarted all of their overseas plants last week but the plants have yet to return to normal operations. Some domestic plants are set to be suspended for several more days this month to control inventories.

Hyundai has seven domestic and 10 overseas plants, whose combined annual capacity reaches 5.5 million vehicles. Kia has eight domestic and seven overseas ones whose capacity reaches 3.84 million units.

In May, Hyundai's overall sales dropped 39 percent to 217,510 units from 358,567, while Kia's declined 33 percent to 160,913 from 238,943 during the same period.

"The company will make efforts to minimize the negative impact of the coronavirus on vehicle sales in global markets and focus on securing stable sales networks despite the virus," Hyundai said in a statement.

Hyundai and Kia are widely expected to miss their combined sales target of 7.54 million autos for this year. They sold a total of 7.2 million units in 2019.

The two carmakers had planned to focus on boosting sales in the U.S. market this year to offset tepid demand in China, the world's biggest automobile market.

They originally planned to launch Hyundai's Tucson sport-utility vehicle, Hyundai's independent Genesis brand's GV80 SUV and G80 sedan and Kia's Sportage SUV in the U.S. later this year but they are still awaiting shipment to the U.S. due to the COVID-19 pandemic.

This photo taken on May 29, 2020, shows vehicles awaiting shipment at the port of Hyundai Motor's main Ulsan plant, 414 kilometers southeast of Seoul. (Yonhap)

GM Korea was the worst performer. Its sales plunged 40 percent on-year to 24,778 units last month from 41,060.

SsangYong Motor's sales dropped 32 percent to 8,254 from 12,122, while Renault Samsung's fell 16 percent to 11,929 from 14,228 due to lack of new models and the coronavirus impact.

SsangYong's Indian parent Mahindra & Mahindra Ltd.'s recent decision not to invest into the Korean unit further drove down its vehicle sales.

Renault Samsung has yet to secure export volume for the XM3 compact SUV from its French parent Renault S.A. to replace the now suspended output volume of Nissan Motor Co.'s Rogue SUV at its sole plant in Busan, 450 kilometers south of Seoul.

Renault Samsung used to produce about 100,000 Rogues a year for exports under a manufacturing contract with Nissan. But the production stopped in March as Nissan cut the output allocation to the plant, citing output losses caused by labor strikes.

From January to May, the five carmakers sold 2,471,186 vehicles, down 22 percent from 3,187,474 a year earlier.

kyongae.choi@yna.co.kr
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