Sales by South Korean carmakers fell a combined 10% in January as debt-heavy home market consumers remained reluctant to spend on new cars, Reuters reported.

Weak sales, which carmakers blamed partly on a three-day lunar New Year holiday in January, will undermine hopes for a broader economic upturn this year – the car industry, which accounts for about 8% of South Korea’s gross domestic product, has said it expects 2004 to be a bumper year, the report noted.

Sales by five carmakers slid 9.8% to a combined 277,161 vehicles in January from 283,561 a year ago as home market sales, hit by a crackdown on household debt, tumbled 39% to 75,791, masking a 27% jump in exports to 201,367 units.

Reuters said Hyundai Motor, with half of the local market, reported an 11.6% fall in January sales to 138,278 units, but saw a modest 5.3% rise in exports to 100,809 vehicles.

“Fewer working days in January meant smaller auto sales,” Hyundai Motor spokesman Jake Jang told Reuters, adding: “But we are looking forward to a better second quarter after a turbulent first quarter.”

The news agency said analysts had mixed views on sales prospects, with some pinning hopes on an expected revival in consumption and others cautious as stocks have risen, weakening export prospects.

“A consumption recovery is still on the cards. Sales should improve from the second quarter given an improving economy,” Shinyoung Securities analyst Chae Kyoung-sup reportedly said.

Hyundai affiliate Kia Motors, the country’s second-largest carmaker, reported January sales down 20% to 57,918 vehicles from 72,151 a year ago while exports fell 5.3% to 42,717.

Reuters noted that GM Daewoo Automotive and Technology, the third-largest carmaker, reported January exports more than tripled to 57,033 units, taking total sales to 64,121 from 29,096 a year earlier.

A GM-Daewoo spokesman reportedly said that Kalos and Lacetti exports to west Europe, where demand for economical vehicles is strong, boosted sales.

Sport utility vehicle maker SsangYong Motor, soon to be taken over by a Chinese firm, reported a 31% fall in sales to 9,992 units after being hit by partial strikes by its 7,500-strong union, which was protesting the takeover, Reuters noted.

Renault-Samsung posted a 40% fall in January sales to 6,852 units, Reuters said.