2003 South Korean Auto Sales - A New Record

SEOUL January 2, 2003; Seon-Jin Cha writing for Dow Jones reported that South Korean auto sales soared to a record high in 2003 as strong overseas demand more than made up for a year of weak domestic spending, according to data issued Friday by the country's five auto makers.

The data showed there was no improvement in domestic demand in December, but consumer appetite is expected to gradually revive, lifting sales at home within the second half of this year.

The five - Hyundai Motor Co. , Kia Motors Corp., GM Daewoo Auto & Technology, Ssangyong Motor Co. and Renault Samsung Motors Corp. - sold a total 3.6 million units, up 6.5% from 2002's 3.4 million units.

In December, the firms sold 385,344 units, up 23% over the previous December's 313,815 units.

In the month, domestic sales of South Korean-made vehicles fell 24% over the year to 100,601 units from 131,689 in the same month in 2002. Export sales surged 56% to 284,743 units in December, from 182,126 units in the same month a year earlier.

The year's total domestic sales reached 1.3 million units, 19% below 2002's 1.6 million, while exports were 30% up at 2.3 million units sold.

In separate statements, Hyundai, the country's largest automaker, said sales totaled 191,028 units in December, up 18% over the year. Exports were up 40% at 142,208 units while domestic sales were down 19% at 48,820 units. For the year, it sold 1.72 million vehicles, down 1% from 2002's 1.74 million. Domestic sales dived 19% while export sales jumped 13%.

In its statement, Hyundai said the export increase resulted from aggressive marketing efforts in North America and Europe.

Kia, an affiliate of Hyundai, sold a record 1.07 million vehicles over the year, thanks to a surge in exports. GM Daewoo also saw strong export sales and slumping domestic demand. It sold 571,219 vehicles in 2003, up 51%. Domestic sales totaled 127,759 units, a fall of 17%, but exports spiked 98%. Renault Samsung which sells mostly in South Korea saw sales drop 4.9% in 2003 to 111,376 units. Domestic sales were down 5.6% at 110,249 units, while exports were sharply higher at 1,127 units, compared with 294 in 2002. Ssangyong's total sales were down 8.3% at 146,696 vehicles, with domestic sales down 11% at 131, 290 units. Exports jumped 25% to 15,406 units.

Expectations among the five are for a better year in 2004, either as a result of an improving economy or through more aggressive promotions and new models.

GM Daewoo, for instance, hopes to sell at least 800,000 vehicles this year by stepping up its marketing efforts and through various payment installment plans. It also aims to introduce an updated Lacetti sedan model early this year and a new compact car model in the latter half.

South Korea's fourth largest carmaker, Ssangyong, too expects brisk sales of its new models such as the New Chairman, a luxury sedan, and New Rexton, an SUV model unveiled in December, the company said.

Hyundai Motor Group, the parent company of Hyundai Motor Co. and Kia Motors Corp., issued its sales target for 2004. Hyundai Motor expects 2004 revenues of KRW31.1 trillion through the sale of a target 2.145 million cars while Kia plans to earn KRW16.67 trillion via 1.16 million units of auto sales in 2004.

Hyundai Motor Co.'s shares closed at 53,300 won ($1=KRW1,195) Friday, up 5.54% or KRW2,800, from last year's close. Shares of Kia Motors Corp. also rose to KRW11,400, up KRW500, or 4.6% from previous close.

According to Song Sang-hun, an analyst at Hyundai Securities, expectations of better fourth quarter earnings from robust exports and the weak won boosted the shares.