South Korean car makers on Wednesday reported a combined 16% rise in May sales from a year ago on solid exports, but production stoppages at some plants saw sales dip from April, a Reuters report said.
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Analysts reportedly warned of a grim outlook for the sector, with local consumers reluctant to spend and export growth showing signs of slowing. Upcoming wage negotiations at major automakers could also lead to industrial action and dent sales, they added, according to the news agency.
“Domestic sales are very disappointing. The effect[s] of new models are tapering off even before they draw full attention from customers,” Suh Sung-moon, a Dongwon Securities analyst, told Reuters, adding: “Without any massive economic stimulus, it doesn’t appear realistic to anticipate a significant recovery in consumption. Labour disputes in June could drag on sales as well.”
Exports by the country’s five auto makers, which have held up well in recent months, saw a heady 22% rise to a combined 336,022 units in May from a year earlier, the report said, noting that compared with a stubbornly weak local market, where combined sales declined around 1% to 90,381 vehicles – overall car sales last month rose to 426,403 from 367,542 a year ago while total sales declined 2.3% from April.
Reuters said Hyundai sold 202,087 vehicles in May, up 6.6% from 189,644 units a year ago, on healthy volume of Sonata sedans and Tucson SUVs in the key United States market.
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By GlobalDataExports, which include models built overseas, reportedly jumped 9.2% to 156,266 units, while local sales fell 1.4% to 45,821 units, but total sales declined 5.1% from the previous month, as the firm had to halt production at its Chinese plant for rebuilding work that will double its capacity to 300,000 units a year.
According to Reuters, Hyundai affiliate Kia Motors’ May sales rose 17% to 104,647 units, buoyed by a 21% jump in exports – local sales gained 5.9% to 22,100 units – but sales were down from April after a shortage of engines caused a brief stoppage at a plant making Carnival [Sedona] minivans and Pride compact cars.
In the run-up to the launch of a new model, Ssangyong, owned by China’s Shanghai Automotive Industry Corp., slashed production for a model changeover last month which hit its sales – it slid 47% to 6,769 units, Reuters said.
GM Daewoo Automotive and Technology Co., South Korea’s third-largest car maker, reportedly said May exports soared 53% to 93,491 units, taking total sales to 103,222, up 48%, – its domestic sales rose 12.3% to 9,731 units.
Reuters said the launch of the large SM7 and the SM5 sedan helped Renault Samsung Motors recover from a long sales slump – its May sales soared 60% to 9,678 units.
