Personal Consumption Tax Effect
In July, Korean-based carmakers’ sales in Korea fell for the first time in 11 months.
According to the Korea Automobile Manufacturers Association (KAMA) on Aug. 1, the domestic sales including complete knock down car sales of five Korean-based carmakers including Hyundai Motor, Kia Corp., GM Korea, and Renault Korea Motors, amounted to 114,894 units in July, down 5.9 percent from the same month of 2022.
It was the first time in 11 months since August 2022 (-1.1 percent) that the five Korean-based automakers recorded a negative domestic sales figure. The number of units sold was also the lowest since 100,523 units in January of this year. January is an off-season for the Korean automobile industry.
In particular, year-on-year sales dropped for Kia (-7.5 percent), KG Mobility (-33.7 percent), and Renault Motors Korea (-59.9 percent) in the Korean market. On the other hand, Hyundai and GM Korea’s domestic sales increased by 2.1 percent and 0.6 percent, respectively.
In addition to a base effect, this can be attributed to the impact of the personal consumption tax, which was reinstated to 5 percent beginning from July. The government had lowered the tax to 3.5 percent to stimulate domestic consumption and then raised it back to 5 percent beginning from July.
On the other hand, their overseas sales climbed 1.9 percent to 560,493 units, while their total sales, including domestic sales and exports, ascended 0.5 percent to 675,387 units.
By company, Hyundai Motor sold 57,503 units at home and 277,456 units abroad. Its total sales swelled by 1.2 percent to 334,968 units in the global market.
Kia Corp. sold 47,500 units in Korea and 212,972 units abroad, totaling 264,772 units in sales. Its domestic sales shrank by 7.5 percent, while overseas sales rose by 2.2 percent, resulting in a 0.3 percent increase in total sales.
GM Korea sold 64,264 units in overseas markets, up 19.1 percent. The increase was driven by the continued popularity of the Chevrolet Trax Crossover and the New Trailblazer.
KG Mobility ramped up sales by 0.9 percent, selling a total of 10,848 units at home and abroad, as the performance of the Torres, a mid-size sport utility vehicle (SUV) launched in 2022, continued to drive the automaker’s sales. In particular, the company sold 6,805 units in export markets last month, reaching its highest monthly sales in nine years since 6,807 units in May 2014.
Renault Korea Motors sold 4,835 units, down 71.0 percent. Renault Korea Motors’ exports and domestic market sales slid 74.8 percent and 59.9 percent to 3,130 and 1,705 units, respectively.