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June 7, 2017

South Korean domestic sales fall 7% in May

Domestic sales among South Korea’s five main automakers continued to fall in May, by 7.1% to 135,443 units from 145,815 units in the same month of last year, according to preliminary data released individually by the country’s vehicle manufacturers.

Domestic sales among South Korea's five main automakers continued to fall in May, by 7.1% to 135,443 units from 145,815 units in the same month of last year, according to preliminary data released individually by the country's vehicle manufacturers.

The data do not include sales by South Korea's low-volume commercial vehicle manufacturers, including Tata-Daewoo and Daewoo Bus Corporation, which typically account for up to 2% of the domestic market.

Also not included in the data are sales of imported vehicles, which exceeded 12% of the total vehicle market last year. These are covered in a separate report later in the month, as soon as the data is released.

The market decline steepened in May from declines of 2% and 5% in March and April respectively, reflecting strong year-earlier sales which were incentivized by sales tax discounts which have since been discontinued.

Most vehicle manufacturers reported weaker domestic sales last month, with only Ssangyong reporting a positive result. In the first five months of the year, domestic sales were lower by 1.7% at 639,843 units, compared with 651,204 units a year earlier.

Global sales among the country's "big-five" automakers, including vehicles produced overseas by Hyundai-Kia, continued to decline sharply in May, by almost 13% to 663,048 from already weak year-earlier sales of 761,233 units – reflecting lower domestic and overseas sales.

Global sales in the first five months of the year were 6.6% lower at 3,317,921 units compared with 3,552,356 units in the same period a year earlier.

Overseas sales, including vehicles produced overseas by Hyundai-Kia, continued to drop sharply last month, by over 14% to 527,605 units from already weak 615,418 sales a year earlier.

This reflects sharply lower sales in China, with the recent deployment of the US missile shield causing a political fallout between the two countries, and also by lower demand in key markets such as the USA.

In the first five months of the year overseas sales were 5.9% lower at 2,678,076 units, from 2,901,152 units previously.

Company developments

Hyundai Motor

Hyundai Motor's global sales fell by close to 12% to 367,969 units in May, from 429,084 units a year earlier, on sharply lower overseas sales. In the first five months of the year, global sales fell by 6.5% to 1,822,116 units from 1,949,078 units a year earlier, driven lower by a sharp sales decline sales in China and the USA.

Domestic sales were slightly lower in May, by 0.4% at 60,607 units from 60,827 units a year earlier, with recently-launched models such as the Grandeur, Sonata and Creta helping the brand outperform. Cumulative five-month sales were 0.6% higher at 282,946 units, compared with 281,154 units a year earlier.

Hyundai's overseas sales fell sharply last month, by 16.5% to 307,362 units from 368,257 units a year earlier, reflecting mainly a sharp decline in sales in China and also weaker volumes in the USA despite the recent roll-out of its Genesis premium brand in this market. In the first five our months of the year, the company's overseas were 7.7% lower at 1,539,170 units, from 1,667,631 units previously.

Hyundai said it has stepped up new model programmes in key overseas markets to help reverse the ongoing decline, including the models tailored specifically for individual markets.

Kia

Kia Motor's global sales fell by 9.8% to 219,128 units in May, from 242,847 units a year earlier, reflecting both weak domestic and overseas sales. Sales in the first five months of the year were 8.5% lower at 1,088,215 units from 1,189,623 a year earlier.

The brand's domestic sales fell by 8.6 % to 43,522 units last month from 47,614 units a year earlier, resulting in a 6.9% fall in year-to-date sales to 208,828 units from 224,244 units previously. The company hopes new models, including the Stinger sporty sedan launched in May, will help reverse the recent decline.

Overseas sales fell by 10% to 175,606 in May from 195,233 units a year earlier, reflecting mainly sharply lower sales in China and a decline also in the USA. Cumulative five-month overseas sales declined by 8.9% to 879,468 units, from 965,379 units last year.

GM Korea

GM Korea's global sales fell by 17% to 43,085 units in May, from 51,907 units a year earlier following sharp declines in both domestic and overseas sales. In the first five months of the year CBU sales were 6.8% lower at 235,306 units compared with 252,435 units a year earlier.

The data do not include exports of CKD kits for assembly overseas, which are substantial.

Domestic sales fell by almost 31% to 11,854 units last month from 17,179 units a year earlier, reflecting sharply lower demand for the Aveo and Impala passenger cars. Year-to-date sales fell by 4.2% to 61,253 units from 68,721 units previously.

CBU exports fell by 10% to 31,231 units last month, from 34,728 units a year earlier, and by 5.3% to 174,053 year-to-date from 183,714 units previously.

Renault-Samsung

Renault-Samsung's global sales fell by almost 15% to 20,517 vehicles in May, from 24,113 units a year earlier, reflecting sharply lower domestic and export sales. Global sales of the SM3 and SM6 sedans and the Rogue SUV declined sharply last month.

In the first five months of the year Renault-Samsung's global sales, excluding CKD exports, were still up by 8.1% at 109,080 88,563 units compared with 100,877 a year earlier – reflecting strong sales in previous months.

Domestic sales fell by over 16% to 9,222 units last month from 11,004 units a year earlier, with year-to-date sales still up by over 21% at 43,900 units from 36,139 units previously.

CBU exports fell by 14% to 11,295 in May from 13,109 units a year earlier, driven lower by particularly weak shipments of SM3 and Rogue SUV models. In the first five months of the year outbound shipments were just 1% higher at 65,198 units from 64,538 units previously.

Ssangyong

Ssangyong Motor, owned by India's Mahindra & Mahindra, reported a 7% drop in sales of built-up vehicles to 12,349 units in May compared with 13,282 units a year earlier, on sharply lower exports sales.

Ssangyong global sales in the first five months of the year were 4.6% lower at 57,648 units, compared with 60,410 units previously.

Domestic sales increased by over 11% to 10,238 units in May, from 9,191 units a year earlier, and were 4.9% higher at 42,934 units in the first five months of the year from 40,946 units previously.

CBU exports plunged by 48% to 2,111 units last month, from 4,091 units a year earlier, and by over 24% to 14,714 units year-to-date from 19,464 units previously.

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