South Korea Domestic Car Demand Falling

Seoul January 25, 2003; Kim Ki-tae writing for Korea Today reported that after record sales last year, carmakers are experiencing a slowdown in domestic sales.

In 2002, drivers had to wait for a few months to get their cars delivered, but the waiting period has fallen to one month this year.

A Hyundai Motor salesman said its Avante XD model is delivered to buyers within one month. The waiting period is 40 days for the Santa Fe and 20-30 days for the EF Sonata. Just one week is needed for delivery of other models, such as the Click, Verna and Terracan, he said.

Production has increased enough to catch up with slowing demand, according to the official.

Kia Motors received 19,000 orders for the first 20 days of January, down 6.2 percent from the same period last year.

Its bestseller Sorento still needs three months for delivery, but the automaker is now able to deliver other models within one month.

Sales of the countrys five automakers have also spiraled 10.7 percent to 65,663 units for the first 20 days of this month, down from 73,522 during the same period of December. Last January, sales rose by 9.9 percent from November.

The sluggish demand is attributable to lackluster consumer sentiment and seasonal factors. January is regarded as a low-demand period.

A temporary excise tax exemption, which triggered demand last year, has also expired.

In response to the trend, GM Daewoo Auto & Technology restarted a free test-drive service yesterday, offering 470 Lacetti models for rental on Cheju Island for one night and two days.

Kia is also giving out free gifts, such as camcorders, to new buyers and is hosting a ski and snowboard competition as part of its promotion campaign.

``At the moment, we are waiting to see what happens and hope the trend is merely temporary. However, carmakers have few models to introduce this year and positive factors are not expected to have a major effect, a Hyundai Motor official said.

``Carmakers will strongly compete for the shrinking market, he said.