Korea’s Auto Industry: S. Korea’s Auto Sales Dip 2.1% in January | BusinessKorea

Thursday, October 27, 2016

Automobiles bound for overseas markets are waiting for shipment at the international auto pier of Pyeongtaek-Dangjin Port.
Automobiles bound for overseas markets are waiting for shipment at the international auto pier of Pyeongtaek-Dangjin Port.
4 February 2014 - 7:02pm

SEOUL, Feb. 3 (Yonhap) -- Sales of South Korean automakers dipped 2.1 percent last month from a year earlier, due mainly to fewer working days from the Lunar New Year holiday, industry data showed on February 3. 

Combined sales of five local car manufacturers, including market leader Hyundai Motor, reached 740,705 vehicles in Jan., down from 756,635 units sold in the first month of 2013.

Domestic sales stood at 106,343 units, up 1.9 percent from 104,377 vehicles for Jan. 2013, while overseas sales, which count both exports and cars made overseas by local original equipment manufacturers (OEMs), were tallied at 634,362, down 2.7 percent from 652,258 reported for the previous year.

“Compared with 2013, when the Lunar New Year holiday was in February, this year’s holiday that fell on Jan. 31 affected the total number of working days that is closely linked to output,” an industry insider said. He said that while the three-day holiday played a role in the weaker numbers, lingering economic uncertainties at home and abroad may have dampened the demand.

He said that on the other hand, South Korean carmakers launched brand new or refreshed models in the past few months that helped sales in the home market.

Four local automakers – Hyundai; GM Korea, the local unit of General Motors of the United States; No. 4 player Ssangyong Motor, the local unit of Indian sport utility vehicle (SUV) maker Mahindra & Mahindra; and Renault Samsung Motor, the smallest of the local OEMs – all did better in terms of sales last month than a year earlier.

Only Kia Motors, Hyundai’s smaller sister company, reported domestic sales dropping 6.2 percent on-year.

In regards to overseas sales, fewer working days affected both cars shipped from South Korea and those made abroad. All car assembly lines operated by South Korean carmakers in foreign markets rely on parts shipped from the country.

Overseas sales of Hyundai and Kia were off 0.7 percent and 0.5 percent each, with domestic production all falling by the 8 percent to 9 percent range compared with last year. But production at their overseas plants was all up, which to some extent compensated for weak local production.

Hyundai Motor

Hyundai Motor, the flagship company of Hyundai Motor Group, the world’s fifth-largest automotive conglomerate, said that its total Jan. sales dipped 0.3 percent from a year earlier, citing fewer working days ahead of this year’s Lunar New Year holidays as the main reason. Domestic sales, however, grew 2.6 percent annually, thanks to robust demand for its brand new Genesis premium sedan and the new Azera hybrid cars.

The Azera, known as the Grandeur in South Korea, sold 8,134 units overall in the month, making it the best seller in the Hyundai lineup. “New car models helped domestic sales in the first month of the year,” a Hyundai official said. 

The company said it sold 411,508 vehicles in Jan., down slightly from 412,894 units tallied for the year before. Its domestic sales, which had generally hurt overall numbers in the past, actually gained 2.6 percent to 51,525 vehicles, while overseas shipments contracted 0.7 percent to 359,983 cars.

Production at Hyundai’s local factories dropped 7.9 percent, highlighting the reduced working days, while overseas production moved up 2.4 percent. “Less working days affected production and sales for the company,” a Hyundai representative said.

The Lunar New Year, which fell on February 3 this year, was a three-day holiday in South Korea. But the demand for new cars like the Genesis sedan bolstered numbers along with the Tucson ix and Santa Fe sport utility vehicles, the company claimed.

Sales of the premium vehicle Genesis, featuring Hyundai’s first all-wheel drive system for a sedan, soared 223.6 percent to 3,728 units.

In addition, sales of the Azera and its hybrid model reached 8,134 units, making it the best-selling Hyundai car last month.

For 2014, the company expects greater competition across the board that will require the carmaker to respond more quickly to any changes.

The carmaker, part of the Hyundai Motor Group, the world’s fifth-largest automotive conglomerate, said it will take steps to strengthen its growth potential in the new year so that it can take advantage of the likely increase in its consumer demand down the road.

In addition to the new Genesis, the company plans to unveil its next generation Sonata mid-size sedan that could help boost its attractiveness to consumers around the world.

Kia Motors

Kia Motors, South Korea’s second-largest automaker, said on February that its sales dipped 1.3 percent in Jan. from a year ago, also mainly due to fewer working days brought on by the Lunar New Year holiday.

The carmaker sold a total of 257,331 units overall last month, down from 260,778 vehicles tallied a year earlier, Kia said in a statement.

Of all cars sold, sales in the home market contracted 6.2 percent on-year to 34,000 cars, while overseas sales stood at 223,331 units, a 0.5 percent dip from Jan. 2013.

“Fewer working days to make cars and an inability to meet some overseas orders affected last month’s numbers,” the carmaker said. It said the drop in local production was offset in part by overseas output.

The Lunar New Year that fell on Jan. 31 was a three-day holiday in South Korea.

Despite the slight contraction, the carmaker claimed that orders for its K9 luxury sedan reached 600 since the 2014 model was unveiled on Jan. 9. The car is sold in the United States as the K900.

It added that demand for the Picanto, Forte, Optima and Sportage R models helped monthly sales figures.

Kia also said compared to December, overall production actually increased 5 percent, fueled by a 9.4 percent jump in overseas sales.

The carmaker, part of the larger Hyundai Motor Group, the world's fifth-largest automotive conglomerate, said it aims to overcome challenges faced by the strong won in 2014 to build up the company's global competitiveness.

A strong won makes locally made products more expensive abroad. Coupled with the weak Japanese yen, the price advantage of local carmakers such as Kia has eroded vis-a-vis their rivals like Toyota and Honda.

Meanwhile, GM's sales gained 8.4 percent, while numbers for Ssangyong and Renault Samsung were up 34.9 percent and 16.9 percent, respectively.

GM Korea

GM Korea, the local unit of General Motors of the United States, said Monday that its sales for Jan. plunged 20.2 percent from a year earlier as overseas demand turned sluggish.

South Korea's third-largest carmaker sold a total of 53,606 vehicles last month, down from 67,210 sold for the first month of 2013, the company said in a press release.

Its domestic sales climbed 8.4 percent on-year to 10,873 units, on the back of demand for steady selling models such as the Aveo subcompact, Cruze compact and Captiva recreational vehicle. The company said sales marked the highest numbers reached for the month of Jan. since 2007, a good sign for the new year.

Overseas shipments, however, fell 25.3 percent to 42,733 vehicles.

GM has said it plans to scale back the market presence of its Chevrolet-badged vehicles in Europe, a step likely to hurt its South Korean affiliate that is a major producer of Chevrolet cars.

The latest data showed the carmaker’s Chevrolet Spark supermini remained by far its best-selling model, with 3,936 units sold in the one-month period.

“The company posted its best ever domestic sales figures last year, and this is being carried over into the new year,” the company’s marketing vice president Marc J. Comeau said.

GM Korea’s exports, hit by weak demand for Chevrolet-badged cars, were down 25.3 percent on-year, with Ssangyong numbers, including so-called knockdown kits used to make cars, falling 6 percent.

Renault Samsung

Jan. sales by Renault Samsung Motors jumped 17.3 percent from a year earlier, helped by demand for popular models such as the SM3 compact sedans and QM5 crossover utility vehicle (CUV), the South Korean division of French automaker Renault SA said.

The country’s smallest car manufacturer by sales said it sold a total of 6,698 vehicles last month, compared with 5,709 units tallied in the first month of 2013.

The press release said domestic sales soared 16.9 percent on-year to 4,500 units, with overseas sales hitting 2,198 vehicles for a gain of 18.2 percent, as models like the SM3 compact sedan and QM5 crossover utility vehicle generated demand in foreign markets. 

The carmaker said last month’s numbers reflected better consumer perception for its car models. Sales of the SM3 increased 48.8 percent on-year, while comparative numbers for the QM5 CUV soared 133.7 percent.

For the whole of 2014, the carmaker predicted sales will likely improve vis-a-vis the year before, with demand rising for some of its models in both the domestic and overseas markets.

Ssangyong Motors

Ssangyong Motors, who mostly makes SUVs and off-roaders, said it sold more than 5,000 vehicles in South Korea last month, thanks to the popularity of its Korando series of vehicles.


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