South Korean automakers, led by Hyundai Motor, said sales in February fell 2% from a year ago because of slack domestic demand and fewer selling days in the month due to the timing of holidays.
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But analysts offered conflicting opinions on whether the sector’s prospects would improve this year as a result of a turnaround in domestic spending, according to Reuters.
“Had it not been for the public holidays, sales would have risen rather than declined,” Suh Sung-moon, an auto analyst at Dongwon Securities, told the news agency. The Lunar New Year holidays fell in February this year but were in January in 2004.
Reuters said exports by the country’s five automakers have fared well in recent months and were up another 4.6% in February to a combined 250,883 units – that took up the slack from a stubbornly weak local market as domestic sales fell 19.8% to 72,078 vehicles from the year-ago period. Overall car sales in February fell to 322,961 from 329,706 a year ago.
While a stronger won currency and higher steel prices have dragged on local carmakers, mounting optimism over a broader economic recovery is helping brighten the prospects for improving local sales, analysts told the news agency.
“We are seeing a few encouraging signals to bet that the long-bearish local auto market may finally turn around from the second quarter,” Suh reportedly added.
In the latest sign of an improving economy, business sentiment hit a 10-month high in March, a central bank survey showed on Wednesday, but some remained doubtful about a recovery in consumer spending, saying it may take a couple of months before a firmer trend can be confirmed, Reuters said.
