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November 2, 2021

South Korean sales fall 21% in October

The global shortage of semiconductors and the recent spike in coronavirus infections affected production and sales.

By Graeme Roberts

Domestic sales by South Korea’s five main automakers combined declined by over 21% to 106,424 units in October 2021 from 135,495 units a year earlier, according to preliminary data released individually by the companies.

The data did not include sales by South Korea’s low volume commercial vehicle manufacturers such as Tata-Daewoo and Edison Motors (in the process of buying bankrupt Ssangyong), as well as sales of imported vehicles which will be covered in a separate report later in the month.

The market continued to be affected by the global shortage of semiconductors and by the recent spike in coronavirus infections. The government has extended the discounted 3.5% vehicle sales tax rate, down from 5%, until the end of the year to help support the local market.

All vehicle manufacturers suffered sharp falls in domestic sales last month with Hyundai reporting a 12% decline to 57,813 units and Kia 21% to 37,837 units. Renault-Samsung sales were down by almost 30% at 5,002 units while Ssangyong sales plummeted by 57% to 3,279 units. But GM Korea was the worst performing automaker, with sales plunging 65% to 2,493 units.

Overall domestic sales in the first 10 months of the year were down by over 19% at 1,074,653 units from 1,330,319 units in the same period of 2020.

Global sales by the country’s big five automakers, including vehicles produced overseas by Hyundai and Kia, declined by almost 21% to 548,192 units in October 2021 from 705,047 units a year earlier with the global shortage of semiconductors and the recent surge in coronavirus infections affecting production and sales domestically and overseas. Total vehicle sales year to date were still up by over 8% at 5,643,375 from 5,207,951 units.

Overseas sales fell 22% to 441,768 units last month, from 569,552 units a year earlier, while year to date volume was still 6% higher at 4,568,722 units from 4,313,056 as demand in key markets such as Europe, South America and Russia rebounded strongly earlier in the year from depressed year earlier level.

Hyundai Motor global sales dropped by almost 21% to 307,039 vehicles in October from 387,197 a year earlier, reflecting declining domestic and overseas sales as the global shortage of semiconductors continued to affect production. Global sales YTD were still up by 12% at 2,925,859 units from 2,605,154 units, driven by particularly strong sales of SUVs and of its upmarket Genesis models earlier in the year.

Domestic sales declined by over 12% to 57,813 units last month from 65,669 units a year earlier, while cumulative 10-month sales were down by 7.8% at 598,655 units from 649,333 previously. The company said volume was also still impacted by the recent surge in coronavirus infections.

Overseas sales fell by 22% to 249,226 in October from 321,528 a year earlier, with deliveries in India falling by 35%, while the YTD total was still up by 12% at 2,636,393 units from 2,343,018 a year earlier, driven by rebounding demand in North and South America, Europe and Russia earlier in the year.

South Korea’s leading automaker warned last September its global sales could slow in the fourth quarter due to the recent surge in coronavirus infections and the ongoing semiconductor shortage, threatening its full year sales target of an 11% increase to 4.16m units from last year’s 3.74m. The company said it would prioritise sales of the Ioniq 5 electric vehicle and the Genesis brand in the fourth quarter.

Kia global sales fell by almost 19% to 217,872 vehicles in October from 268,729 units a year earlier, reflecting falling domestic and overseas sales which the company blamed on the continued semiconductor shortage. Total volume YTD were still up by 9.6% at 2,337,495 units from 2,133,199 a year earlier with the Sportage SUV its best-selling model globally.

The company said it did not expect to reach its full year global sales target of 2.92m units due to the ongoing parts shortage.

Domestic sales dropped by over 21% to 37,837 units last month from 48,009 units a year earlier and were down by almost 5% at 440,185 units YTD from 463,019 despite strong demand for the Sportage and Sorento SUVs and the Carnival MPV.

Overseas sales fell 18% to 180,035 units in October from 220,720 a year earlier, while the cumulative 10-month total was still up by close to 14% at 1,897,310 units from 1,670,180 units, driven by rebounding demand in Europe and North America.

GM Korea global sales plunged 78% to 6,875 vehicles in October from 31,391 units a year earlier with the continued global semiconductor shortage affecting both domestic and export sales. Year to date, the company’s global sales declined by almost 30% to 211,239 units from 300,352.

Domestic sales plunged by close to 65% to 2,493 units last month from 7,064 units a year earlier and were down by almost 27% at 49,156 units year to date from 67,076 . Exports plunged 82% to 4,382 units in October from 24,327 a year earlier and by 30% to 162,083 YTD from 233,276.

Renault-Samsung saw global sales surge 54% to 11,627 units in October from weak year-earlier sales of 7,533, reflecting a strong rebound in overseas sales. Year to date, global sales were still down by 3% at 102,179 units from 99,077 units previously.

Domestic sales continued to fall last month, by 30% to 5,002 units from 7,141 units a year earlier and were down 41% at 47,785 YTD from 80,722 as the automaker faced increasingly tough competition from domestic rivals Hyundai and Kia and from imports.

Exports continued to rebound strongly in October, with volume surging to 6,625 units from 392 a year earlier as the company stepped up shipments of the XM3 and QM6 SUVs badged Renault to Europe. Year to date exports tripled to 54,394 units from 18,355.

Ssangyong Motor global sales fell by 40% to 4,779 vehicles in October from 10,197 units a year earlier, reflecting a sharp decline in domestic sales, and were down by over 17% at 66,603 units YTD from 84,904 previously.

Domestic sales fell by 57% to 3,279 units last month from 7,612 a year earlier and by 33% to 47,090 units YTD from 70,169 units. Exports plunged 42% to 1,500 units in October from 2,585 but were up 59% at 19,513 units year to date from 14,735.

The Seoul Bankruptcy Court last month accepted local electric vehicle manufacturer Edison Motors as the sole preferred bidder for the bankrupt automaker and a formal offer for the company is expected to be made before the end of November after a final two weeks of due diligence.

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