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Korean Automakers See Car Sales Decrease for 3 Consecutive Months
Slowness Continued
Korean Automakers See Car Sales Decrease for 3 Consecutive Months
  • By Jung Min-hee
  • June 2, 2017, 08:15
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The decrease in domestic sales and overseas shipments of cars in May hit a record high for the year.
The decrease in domestic sales and overseas shipments of cars in May hit a record high for the year.

 

South Korea's five automakers saw their sales figures decrease last month for the third consecutive month. They have been suffering from sluggish sales in both domestic and global markets after March this year and double-digit drops in sales from April. The sales decline in May is mainly attributed to the decrease in working days and business days due to the extra-long weekend.

Moreover, new car buyers can no longer benefit from the 30 percent reduction in individual consumption tax which buoyed vehicle sales last year. For the global market, shipments in China backtracked as the retaliatory measures against South Korea over the deployment of an advanced U.S. missile defense system adversely affected consumer sentiment in the world's No. 2 economy. The sluggish economy in emerging markets is another factor. These are why industry sources believe that the companies will have difficulties in bouncing back.

According to five car markers – Hyundai Motor Co., Kia Motors Corp., GM Korea Co., Renault Samsung Motors Corp. and Ssangyong Motor Co. – on June 1, overseas sales stood at 663,048 units last month, down 12.9 percent from the same period a year ago, while domestic sales edged down 7.1 percent on-year to 135,443 units. Shipments also showed a whopping 14.3 percent, or 90,000 units, decline to 527,605 units. All the figures backtracked. The five companies saw their global sales significantly decrease last month compared to 7.7 percent in March.

The decrease in domestic sales and overseas shipments hit a record high for the year. The fall in domestic sales last month is three times higher than 1.9 percent in March this year. The drop in exports over the same period also went up double digits.

GM Korea has the highest drop in domestic sales. Despite the sales growth of mid-size sedan, such as the Malibu, the total sales in the domestic market decreased as much as 31.1 percent as the sale of the Spark halved compared to the previous year. Hyundai Motor, Kia Motors and Renault Samsung showed their domestic sales decrease as well.

On the other hand, Ssangyong Motor posted an 11.4 percent growth in sales due to growing sales of the Tivoli brand and the G4 Rexton. The G4 Rexton sold 2,703 units last month, the first month of the release.

Exports of the five automakers dropped more than 10 percent. Ssangyong Motor was the only company showing growth in the domestic market, but saw its exports decrease 48.4 percent due to the lower demand in emerging markets.