South Korean Car Production Forecast to Fall Short of Target

Seoul October 11, 2003; Bae Keun-min writing for the Korea Times reported that domestic car production fell this year, as local demand was sluggish despite robust exports.

In the first nine months of this year, production topped 2,258,649 units, off 0.1 percent, or 2,022, from the same period last year, according to the Korea Automobile Manufacturers Association (KAMA).

The output is equal to 70.5 percent of the goal set by the five carmakers in Korea _ Hyundai Motor, Kia Motors, GM Daewoo Auto & Technology, Ssangyong Motor and Renault-Samsung Motors.

They had targeted an increase of production by 1.8 percent to 3.2 million this year from 2002.

Production topped 269,378 units last month, up 37.4 percent from August and up 7.1 percent from a year ago.

Carmakers are worried over the possible negative effect of the weakening dollar on their profits this year. About 70 percent of car export bills are settled in dollars.

A KAMA official estimated that a 1 percent gain of the local currency against dollar translates into a fall of 1.14 percent in exports.

GM Daewoo Auto & Technology churned out 34,876 units in September, up 81.9 percent over a year ago, while it recorded 258,573 units of production in the first nine months of this year, up 15.5 percent from the same period last year.

But the largest carmaker, Hyundai, registered a 4.4 percent fall in production to 1.18 million in the first nine months of this year, accounting for 52 percent of total production in Korea, off 2.3 percentage points from last year.

Renault-Samsung produced 92,359 vehicles in the first nine months of this year, up 11.8 percent over the like period last year.