South Korean Domestic Auto Sales Shrink Again

Seoul June 1, 2004: Bae Keun-min writing for the Korea Times reported that fluctuating international crude oil prices and an economic slowdown have discouraged local consumers from reaching into their purses to buy new vehicles, despite aggressive sale promotion by the five domestic automakers.

According to industry sources, the five companies, namely Hyundai Motor, Kia Motors, GM Daewoo Auto & Technology, Ssangyong Motor and Renault Samsung Motors, together sold 366,345 units in May, down 3.3 percent from April.

They retailed 91,235 units in the local market last month, down 8 percent from April, while shipping 275,110 units of vehicles to overseas markets, down 1.7 percent on-month.

The sales, however, rose 18.2 percent from a year ago, with exports surging by 43.7 percent. But the local sales plummeted by 22.9 percent on-year.

As every May posted some 9-percent increment in sales on-year for the last few years, the slump in local sales of automobiles is considered to be a serious situation.

For the first five months of the year, the automakers posted cumulated sales of 1.74 million units, comprising 449,997 units for domestic and 1.29 million units for overseas markets, up 15.4 percent compared to the same period last year. The exports jumped 50 percent, while domestic sales dwindled by 27.8 percent.

Hyundai retailed 189,833 units in May, up 1.7 percent over April, thanks to its exports marking a 6.1-percent on-month rise to a monthly record high of 143,339 units. But the local sales shrank 9.8 percent to 46,494 units on-month.

Hyundai¡¯s May performance recorded a 25.5-percent gain in exports and a 15.3-percent loss in local sales from a year ago.

Kia Motors posted a 7.3-percent fall in sales to 89,484 units on-month, including 20,864 units for the domestic and 68,620 units for abroad markets, both decreasing by 6.5 percent and 7.5 percent.

Kia¡¯s overseas performance improved by 44.1 percent over a year ago, although domestics business shrank 32.8 percent in May from the preceding year.

GM Daewoo sold 8,663 units in the nation and 59,674 units abroad for total sales of 68,337 units last month, up 73 percent over a year ago, due to strong exports with a 114.7-percent gain on-year. Local sales slumped by 26 percent to 8,663 units from a year ago.

GM Daewoo¡¯s combined May sales, however, decreased by 11.3 percent over April as exports and domestic sales decreased by 11.8 percent and 7.8 percent on-month.