Automobile Industry
The domestic automobile market is losing steam, with all of the five automakers in Korea having shown a poorer month-on-month performance in June.
Specifically, Hyundai Motor Company sold 412,648 cars at home and abroad in that month to record a negative growth of 0.8 percent and the figures were 245,234 (minus 3.3 percent) for Kia Motors and 51,445 for GM Korea (minus 2.6 percent). The sales volume of Renault Samsung Motors, which showed an excellent performance in May in spite of fewer business days, dropped as much as 15.2 percent in the following month. Still, its year-on-year growth rate amounted to 36 percent to overwhelm those of the others.
GM Korea recently announced that it sold 71,958 cars in the domestic market during the first half of this year, which is the highest half-yearly record in 11 years. However, the sales volume for June and the first half of 2014 decreased by 26.8 percent and 18.5 percent compared to the same period last year, respectively.
In the meantime, Ssangyong Motors’ volume fell 1.9 percent month-on-month and 7.8 percent year-on-year, despite the current peak season of sports utility vehicles. “The monthly sales for June dropped a little, but due to the shrinkage in the domestic market, decreasing demand from emerging markets and exchange rate factors,” the company explained.
The carmakers are concerned over the possible impact of the decreased monthly sales on the second half. The mobile phone market, which is one of the important pillars of the Korean economy, has already fallen into a slump. The national economy could be in the face of even greater difficulties if the automobile market follows it.
In the first half of 2014, all of the Korean carmakers recorded positive growth, with the only exception of GM Korea. Hyundai Motor Company and Kia Motors grew 4.4 percent and 7 percent each, while Renault Samsung Motors’ and Ssangyong Motors’ growth rates were both 6.9 percent. Although the percentages are single-digit, the results are meaningful enough in view of foreign exchange fluctuations and the dampened consumer sentiment during the period.
The companies are planning to cope with the situation with new models. Hyundai Motor Company is preparing to continue the new car effect from the New Genesis and LF Sonata through the second half. The number of contracts for the diesel model of the Grandeur, which is available from this month, has hit 1,800 in 20 days. Kia Motors is going to step up its marketing for the All New Carnival minivan and release the new Sorento R in the near future. Renault Samsung Motors released the SM5 Diesel this month, too.