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July 3, 2019

South Korean market down in June

Domestic sales by South Korea’s five largest automakers fell by 5.2% to 124,963 units in June 2019 from 131,827 units in the same month of last year, according to preliminary data released individually by the companies.

By bcusack

Domestic sales by South Korea's five largest automakers fell by 5.2% to 124,963 units in June 2019 from 131,827 units in the same month of last year, according to preliminary data released individually by the companies.

The data do not include sales by South Korea's low-volume commercial vehicle manufacturers, including Tata-Daewoo and Daewoo Bus Corporation, as well sales of imported vehicles which are covered in a separate report when the data are released later in the month. Together they accounted for close to 15% of total vehicle sales in the country last year.

Economic growth in the country has slowed sharply this year, reflecting weaker domestic sentiment and falling exports as the trade war between the USA and China continued to intensify. The vehicle market in June also succumbed to weaker consumer sentiment, with recent new model launches by Hyundai now struggling to lift the overall market.

Hyundai reported a domestic sales rise of just 2.5% to 42,405 units in June after much stronger growth earlier in the year, while Renault-Samsung's sales enjoyed a 6.2% rebound to 7,564 units following strike action in previous months. Kia's sales fell by 7.8% to 42,405 units last month, while Ssangyong's were down by 15% at 8,219 units and GM Korea's plunged by 39% to 5,788 units.

Overall domestic sales in the first half of the year were just slightly lower at 755,037 units from 756,402 units in the same period of 2018.

Global sales among the country's "big-five" automakers, including vehicles produced overseas by Hyundai and Kia, fell by 8.8% to 680,455 units in June from 745,753 units a year earlier –reflecting weaker domestic and overseas sales. Total volumes in the first six months of the year were 4.9% lower at 3,867,915 units from 4,067,452 in the same period of last year.

Overseas sales, including vehicles produced overseas by Hyundai and Kia, fell by 9.5% to 555,492 units last month from 613,926 units a year earlier and by 5.8% to 2,636,713 units year-to-date from 2,799,991 units. This reflects sharply lower sales in China and also slowing demand in India and other emerging markets, while sales in the USA are beginning to improve.

Hyundai Motor's global vehicle sales declined by 8.3% to 378,714 units in June from 412,852 units a year earlier, with a moderate rise in domestic sales more than offset by sharply-lower overseas demand. The brand's global sales in the first half of the year were down by 5.1% at 2,127,611 units from 2,241,530 units in the same period last year.

Domestic sales in June continued to be lifted by strong demand for new SUVs such as the Palisade and Santa Fe, with overall deliveries to dealers rising by 2.5% to 60,987 units from 59,494 units a year earlier. First-half sales were 8.4% higher at 384,113 units from 354,381 units a year earlier.

Overseas sales plunged by over 10% to 317,727 units last month from 353,350 units a year earlier and by 6.3% to 1,654,711 units in the first six months of the year from 1,766,436 units previously, reflecting declining sales in China and other emerging markets including India. The company hopes its sales in the USA will pick up momentum in the second half of the year following the launch of the Palisade last month.

Kia Motors' global sales fell by 6.2% to 236,229 vehicles in June from 251,856 units a year earlier, reflecting weaker domestic and overseas sales. In the first six months of the year the brand's global sales were down by 2.4% at 1,353,127 units from 1,386,408 units previously.

Domestic sales fell by 7.8% to 42,405 units last month from 46,000 units a year earlier and by 9.3% to 242,870 units in the first six months of the year from 267,740 units a year earlier, as overall domestic demand for vehicles declined.

Overseas sales fell by 5.8% to 193,824 in June from 205,856 units a year earlier and were slightly lower at 1,109,363 units year-to-date from 1,118,708 units previously, with continued weakness in China offsetting a pick-up in sales in the USA and Europe. The company plans to step up new model launches this year, including an all-new Soul SUV and the global rollout of the new Seltos entry-level SUV.

GM Korea's global sales dropped by close to 22% to 36,451 units in June from 46,546 units a year earlier, reflecting sharply weaker domestic and export sales. Sales in the first half of the year were 5.8% lower at 231,172 units from 245,486 units in the same period of last year.

Domestic sales plunged by over 39% to 5,788 units last month from 9,529 units a year earlier, despite the recent launch of the updated Spark mini-car and the new Trax compact crossover vehicle. Sales in the first six months of the year were close to 16% lower at 35,598 units from 42,297 units previously.

Exports fell by over 17% to 30,663 units in June from 37,017 units a year earlier and by 4.1% to 195,574 units year-to-date from 203,889 in the same period of last year.

The company plans to launch the Transverse SUV and the Colorado pickup truck later this year to help strengthen domestic sales. It also plans to begin local production of the Trailblazer SUV by the end of the year, which should help both domestic and export sales.

Renault-Samsung, which is 80%-owned by France's Renault, said its global sales continued to fall in June – by close to 15% to 18,686 units from 21,921 units a year earlier, reflecting sharply lower export sales. Overall sales in the first six months of the year were more than 33% lower at 84,188 units from 126,018 units in the same period of last year.

Deliveries this year have been affected by a prolonged dispute with its labor union over wages and working conditions, which the company estimates resulted in a production loss of more than 14,000 vehicles.

Domestic sales rose by 6.2% to 7,564 units in June from 7,120 units a year earlier, but were almost 15% lower at 36,506 units year-to-date from 42,920 units previously. Exports plunged by almost 25% to 11,122 units last month from 14,801 units and by almost 43% to 47,682 units year-to-date from 83,098 units previously.

Ssangyong Motor, majority-owned by India's Mahindra & Mahindra, reported a more than 18% drop in global sales to 10,159 units in June from 12,434 units a year earlier, reflecting weak domestic and export sales. In the first six months of the year the brand's sales were up just by under 2% at 68,189 units from 66,948 units in the same period of last year.

Driving sales forward this year is strong global demand for the Rexton Sports SUV and the recently launched updated Korando model. In early June Ssangyong also launched an updated Tivoli SUV, which should help underpin sales in the second half of the year.

Domestic sales declined by over 15% to 8,219 units in June from 9,684 a year earlier, but were up by 8.6% at 55,950 units year-to-date from 51,505 units a year earlier. Exports plunged by over 25% year-on-year to 2,156 units last month from 2,894 units and were down by 8.2% to 14,327 units year-to-date from 15,605 units.

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