KIA Motors has cut its South Korean home market sales target for this year by more than 10% to 440,000 vehicles, citing sluggish demand, local media reported, according to Reuters.

Citing a report by Internet news provider MoneyToday, Reuters said Kia, an affiliate of Hyundai Motor, also attributed the lowered local sales target to fierce competition with rivals GM Daewoo Automotive & Technology Co and Renault Samsung Motors.

“The domestic automobile market is expected to see fierce competition in the second half,” Kia’s president and CEO Kim Noi Myung was quoted as telling company officials at a seminar at a northeastern resort.

Reuters noted that South Korea’s economy, Asia’s fourth-largest, contracted in the first quarter for the first time in more than two years as domestic spending crumbled amid worries over North Korea’s nuclear ambitions and a global economic slowdown. Analysts have warned the economy may have contracted again in the second quarter, signalling the first recession in five years, the report added.

According to Reuters, an auto industry association said earlier this month that South Korean car makers are expected to see total domestic sales fall 5.7% this year to 1.530 million vehicles.