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Import Car Sales Increases While Local-manufactured Car Sales Decreases
Bitter-Sweet Story
Import Car Sales Increases While Local-manufactured Car Sales Decreases
  • By Jung Min-hee
  • July 7, 2017, 01:45
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The sales of foreign brand vehicles in June showed a whopping 22.6 percent growth to 23,755 from a month ago while domestic car brands see their sales drop.
The sales of foreign brand vehicles in June showed a whopping 22.6 percent growth to 23,755 from a month ago while domestic car brands see their sales drop.

 

Imported car and domestic car brands accomplished conflicting results in the domestic car market.

According to the Korea Automobile Importers & Distributors Association (KAIDA) on July 6, the number of newly registered foreign vehicles rose to 118,152 in the first half of this year, up 1.2 percent from a year earlier. In particular, the number of newly registered foreign vehicles in June showed a whopping 22.6 percent growth to 23,755 compared to the previous month.

By brand, Mercedes-Benz topped other imported brands in the first half of this year by selling 37,723 vehicles, up 54 percent from the same period a year ago. Mercedes-Benz sold 7,783 vehicles in the domestic imported vehicle market last month, winning back first place from its archrival BMW which ranked first in April and May. Although BMW lost the lead to Mercedes-Benz, it saw its sales rise by 25.2 percent compared the same period a year earlier by selling 28,998 units.

Japanese car brands also bounded ahead. Honda and Toyota sold 5,385 and 5,855 units in the domestic car market in the first half of the year, showing a high growth rate of 73 percent and 30.4 percent, respectively.

Unlike imported car brands, which have been continuously expanding dominance in the domestic market, however, domestic car brands see their sales drop. Five South Korean automakers – Hyundai Motor, Kia Motors, GM Korea, Renault Samsung and Ssangyong Motor – sold a total of 4 million units at home and abroad in the first half of the year, down 6.6 percent from the same period a year ago. Their sales in the domestic market decreased 0.6 percent on-year to 779,685 vehicles.

By brand, Hyundai Motor and its smaller affiliate Kia Motors and GM Korea struggled in the domestic market. Hyundai-Kia Motors sold 344,783 and 255,843 units in the first half, down 1.8 percent and 7.6 percent from a year earlier. GM Korea saw its sales decline as much as 16.2 percent to 72,708 units during the same period.

The problem is there is no clear breakthrough in the domestic and global markets in the second half of the year. In addition, the labor unions at the domestic automakers are preparing to strike. Hyundai Motor’s labor union, which is part of the hardline umbrella union Korean Metal Workers’ Union, announced on the same day that the negotiations with its management have broken up and is gearing up to go on a strike. Kia Motors’ union already announced on June 29 that negotiations fell apart with the company and filed for dispute mediation with the National Labor Relations Commission on July 3. GM Korea’s union also announced on June 30 that the negotiations with its management failed to end in agreement and filed for dispute mediation with the National Labor Relations Commission.