Car Sales Hit 6-Year High Despite Export Slump

Kim Ki-tae a staff reporter for Korea Times reported that car sales in the local market have hit a six-year high for the last seven months thanks to the economic recovery and an excise tax cut. But exports declined 6.4 percent to 794,593 units over the period.

According to the Korea Automobile Manufacturers Association (KAMA), 943,508 vehicles have been sold from January through July, the highest sales record since the record 950,866 units sold in the corresponding period of1996.

For the seven months, passenger car sales totaled 712,700, second only to the 715,196 passenger vehicles sold in the same period in 1996.

Automobile sales in the domestic market were 886,860 units in 1997, but halved dramatically to 428,950 cars in 1998 due to the financial crisis.

Sales have hit an upturn since then to post 654,574 units in 1999, 852,167 units in 2000, falling to 834,416 units last year.

Considering the strikes at Hyundai Motor and Kia Motors over the last two months, have hampered production and left 200,000 customers on waiting lists, the potential sales for the seven months is assumed to have been a record high, exceeding 1996 figures.

The ``explosive rise in domestic sales is attributable to the high demand during the World Cup and local elections in June, in addition to the economic recovery and an excise tax cut.

Greater consumer appreciation for sport utility vehicles (SUV) and larger sedans are also believed to have contributed to the sales increase.

In a breakdown of class, SUV sales rose 60.2 percent to 171,277 units and large sedans with engines of more than 2.0 liter displacement posted a 25.3 percent rise in sales for the seven months, while compact car sales slid 29 percent to 35,771 units.

``The depressed car market that was impacted by the financial crisis has returned to its normal pace and a few positive factors have helped drive up demand, said a KAMA official said.

He estimated that this year could be a record sales year for Korean automakers.