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Korean Carmakers Suffer Sharp Drop in Exports in May
Summer Labor Struggle to Weigh on Carmakers
Korean Carmakers Suffer Sharp Drop in Exports in May
  • By Jung Min-hee
  • June 4, 2019, 10:59
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Korea’s five major carmakers suffered a sharp drop in their sales overseas in May.

Korea’s five major carmakers suffered a sharp drop in their sales overseas in May, while recording a small gain in their domestic sales.

The five companies -- Hyundai Motor, Kia Motors, SsangYong Motor, GM Korea, and Renault Samsung Motors – saw their combined overseas sales drop by 40,106 units from a year ago, against an increase of a mere 56 units in domestic sales. Exports account for about 80 percent of these companies’ total sales.

A tally of the five companies’ performances in May showed that they sold a total of 663,984 units at home and abroad, down 5.81 percent from the same month last year.

Domestic sales grew 0.04 percent (56 units) to 133,719 units while exports fell by 7.18 percent (41,036 units) to 536,255 units. As of May, exports accounted for 79.86 percent of the five automakers’ total sales.

Hyundai Motor and SsangYong Motor saw their domestic sales slightly go up. In May, Hyundai Motor sold 67,756 units in Korea, up 9.5 percent from the same month last year. In the same period, SsangYong Motor sold 10,106 units, up 4.1 percent.

However, the increase was far from enough to make up for the decline of the remaining three firms -- Kia Motors, GM Korea and Renault Samsung. Kia Motors sold 43,000 units, down 8.6 percent from the same month last year, while GM Korea and Renault Samsung sold 6,727 units and 6,130 units, down 12.3 percent and 16.5 percent, respectively.

Even Hyundai Motor which enjoyed strong domestic sales suffered a drop in exports. Hyundai Motor sold only 289,759 units in May, down 11 percent from the same month last year. Kia Motors' exports also slid by 2.2 percent to 196,059 units, while SsangYong Motor’s exports sank 37.2 percent to 2,016 units and Renault Samsung’s exports dropped 7.5 percent to 8,098 units. Only GM Korea posted an export increase of 3.4 percent by shipping 34,333 units.

A gloomy propect lies ahead of the five automakers. The domestic car industry will enter the summer labor struggle season in June. The labor union and management of Hyundai Motor has already begun wage and collective bargaining negotiations. The union has set the goal of reaching an agreement before the Chuseok holiday, which falls on Sept. 13, but industry watchers say that it will not be easy to attain the goal in light of a wide gap between the two sides regarding the ordinary wage and the extension of retirement ages.

At GM Korea, the labor and management are still at loggerheads over the application of the existing collective bargaining agreement to a new R&D corporation spun off from GM Korea. The union has already secured the right to go on strike.

At Renault Samsung, the union and management have yet to wrap up the wage and collective bargaining negotiations for 2019 that started a year ago.