A Direct Hit by Novel Coronavirus
In April, overseas sales volumes of five carmakers operating in Korea, including Hyundai and Kia, were hit hard by the new coronavirus pandemic. This is because the COVID-19 virus has spread worldwide, including in the United States and Europe, which are major auto markets, and local production bases have been closed and demand has been weakened.
The red light turned on about the future earnings when making allowance of the sharp decline in overseas sales in April, the first month of the second quarter. In the Korean market, the automakers except SsangYong Motor which launched no new model put up a good fight thanks to new model launches.
In April, Hyundai Motor announced on May 6 that it sold 88,037 units overseas, down from by 70.4 percent from 297,540 units in the same month of 2019. This is because its major overseas factories were shut down and demand contracted. In the United States, one of the world's largest markets, new car sales plummeted 53 percent in April, and, also suffered from an 89 percent decline in France and a 98 percent drop in Italy in Europe, another major market.
Kia Motors also suffered setbacks in overseas markets. It sold 83,855 units in overseas markets in April, down 54.9 percent from the same period of 2019.
Overseas sales of the other three companies excluding Hyundai and Kia Motors, also plunged. GM Korea's export volume in April reached 2,043 units, down 32.8 percent from the same period of the previous year, while that of Renault Samsung crashed to 2,072 units, down 72.5 percent coupled with the end of Nissan Rogue production. SsangYong's exports hit 796 units, down 67.4 percent from 2,438 units in the same month of 2019.
As the number of overseas sales declined by the Corona 19 direct munitions was confirmed as a figure, a warning light has been turned on about second quarter sales performances of Hyundai and Kia which put up a good fight in the first quarter. In March, when the novel coronavirus began to spread to major overseas markets, Hyundai Motor's overseas sales volume sank 26.2 percent on year and those of Kia Motors 11.2 percent on year. However, in a month, their decline increased to 70.4 percent and 54.9 percent, respectively.
A good news is that the Korean car market is showing a sign of recovery as the production and demand are being normalized with the virus crisis has been under control in Korea. In particular, most automakers enjoyed new model launch effects by aggressively releasing new models. In April, Kia Motors sold 5,361 units in Korea, 19.9 percent more than the same period of 2019. The greatest contributor was the fourth-generation “Sorento.” The Sorento sold 9,270 units, becoming Kia's best-selling model in April. Hyundai sold 7,042 units in Korea, down 0.5 percent from the same month in 2019. The Grandeur which sold 15,000 units, led sales, and the full-change Avante model released in April, also sold 8,249 units, getting off a good start. Renault Samsung enjoyed a jump of 78.4 percent in sales from its 6,175 units to 11,015 units due to the XM3 which sold 6,276 units. GM Korea sales also increased 4.2 percent 6,706 units in April from 6,433 units in the same month in 2019 to as the new model Trailblazer took the lead in sales in Korea.
However, SsangYong Motor, which suffered from severe management difficulties, was unable to launch a new model, struggling not only in overseas markets but also in the Korean market. Its sales of all types of vehicles, which showed an overall decrease from the previous month, dropped to 6,017 units from the same month of 2019 and recorded a year on year decrease of 41.4 percent. SsangYong Motor, which recorded a deficit for 12 consecutive quarters until 2019, has halted its factory to reduce fixed costs and sent employees on rotational leaves.