Export Unit Price of Korean Autos Lowered for 3rd Consecutive Quarter

The average unit price of Korean auto exports decreased for the third straight quarter, contributing to the worsening performance of the car industry.

According to industry sources and the Korea Automobile Manufacturers Association on July 29, five local car makers exported 809,643 units in the second quarter of this year, a year-on-year reduction of 0.2 percent. Exports amounted to US$11.48676 billion, down 3.9 percent from the previous year.

As a result, the average unit price of auto exports by these five companies was US$14,200 per unit. The number is a 3.7 percent year-on-year decrease, compared to US$14,700 in Q2 2014. Considering that the exchange rate was 1,099 won to 1 dollar on average during the first half of 2015, a locally-made car was exported for 15.6 million won on average.

The unit price of auto exports has fallen from a peak of US$14,900 per unit in Q3 2014 to US$14,600 in Q4 2014, and to US$14,400 in Q1 2015.

An industry source said, "Exports shrank due to the recession. Weak currencies like the euro and ruble also contributed to a decrease in export unit prices. So, the local auto industry is having a double whammy of a reduction in the amount of exports and a decrease in export unit prices."

Reflecting these phenomena, Hyundai Motor and Kia Motors reported a year-on-year decrease of 16.1 percent and 15.5 percent each in operating profits during Q2 of this year, with 1.7509 trillion won (US$1.4987 billion) and 650.7 billion won (US$556.7 million), respectively. Ssangyong Motor posted operating losses of 19.9 billion won (US$17.0 million) in the period.

As for export unit prices per local automaker, Hyundai Motor recorded US$15,900 per unit, which was the highest, followed by Ssangyong Motor with US$15,500, Renault Samsung Motors at US$15,500, Kia Motors at US$13,300, and GM Korea at US$11,800.

What is encouraging is that the weight of the export of compact cars produced by Hyundai Motor and Kia Motors is decreasing. If the exchange rate improves in the latter half, the unit price of exports can increase sharply.

Hyundai Motor's compact cars accounted for 53.7 percent of the nation's total auto exports in the first half, down 1.6 percent from the 55.3 percent of a year ago. Kia Motors also saw its auto exports weight decrease by 1.8 percent, from 47.3 percent in the first half of 2014 to 45.5 percent in the first half of 2015.