Production, Domestic Demand, Exports All on Steady Decline
South Korea’s auto industry is shrinking, with production, domestic consumption and exports all on a steady decline amid global economic slowdown, intensifying competition and labor strikes.
Domestic automobile production and demand declined by 0.8 percent and 0.3 percent in the first quarter of this year compared to a year earlier, according to the Ministry of Trade, Industry and Energy (MOTIE) on April 17. Auto exports increased 2.4 percent in the third quarter. However, production, demand and exports all decreased in March.
The number of vehicles produced in domestic factories totaled 954,908 in the first quarter. Hyundai Motor Co., Kia Motors Corp. and SsangYong Motor Co. saw their vehicle output grow but partial strikes by workers of Renault Samsung Motors Corp. dragged down the overall figure by 0.8 percent from a year ago. Domestic demand stood at 413,701 units, down 3 percent, over the same period. Sales of imported cars dropped 21.4 percent.
Automobile exports reached 587,690 units in the first quarter. Outbound shipments went up by 2.4 percent in terms of volume and 4.7 percent in terms of value, led by environment-friendly cars, including electric vehicles, sport utility vehicles and compact cars,
However, production, domestic demand and exports all declined in March -- 5.5 percent, 5.7 percent and 3.3 percent, respectively. This was largely due to the fall in the number of working days from 21 to 20 and the partial strikes at Renault Samsung Motors.
The number of vehicles produced in South Korea was 343,327 in March, down 5.5 percent from a year earlier. SsangYong Motor was an exception as it showed a 21.1 percent growth in production. Hyundai Motor saw its production decrease by 0.7 percent, Kia Motors 6.4 percent, GM Korea 8.4 percent and Renault Samsung Motors 40.4 percent. Renault Samsung’s output tumbled because of 12 days of partial strikes out of 20 working days. It accounted for 47 percent of the industry’s total output reduction.
In the domestic market, car sales also went down by 5.7 percent to 156,927 vehicles during the period.
Exports fell by 3.3 percent over the year to 213,736 units in March. Especially, Renault Samsung Motors saw its major export model production drop owing to the partial strikes and its exports declined by 62.3 percent on-year to 12,003 vehicles.
By country, shipments to the European Union (EU) plunged by 15.2 percent on-year in March to US$753 million (854.88 billion won), Oceania 5.5 percent to US$207 million (235.01 billion won) and Latin America 25.6 percent to US$178 million (202.10 billion won). On the other hand, shipments to North America moved up by 7.5 percent to US$1.60 billion (1.82 trillion won), Eastern Europe 3.1 percent to US$275 million (312.26 billion won), Asia 29 percent to US$234 million (265.71 billion won) and Africa 77.8 percent to US$170 million (193.04 billion won) over the cited period.
The car parts shipments lost 0.8 percent on-year to US$1.93 billion (2.19 trillion won) in March. Its shipments to North America fell by 0.7 percent to US$657 million (746.02 billion won) and the EU 0.4 percent to US$353 million (400.83 billion won).