Kia hopes new models like the Seltos small SUV and redesigned Soul will give 2019 sales a year-end boost

Kia hopes new models like the Seltos small SUV and redesigned Soul will give 2019 sales a year-end boost

Domestic sales by South Korea's five largest automakers declined by 6.2% to 118,479 units in August 2019 from 126,336 units in the same month of last year, according to preliminary data released individually by the companies.

The data did not include sales by low-volume commercial vehicle manufacturers, including Tata-Daewoo and Daewoo Bus Corporation, as well as sales of imported vehicles which will be covered in a separate report when the data is released later this month. Together these accounted for close to 15% of total vehicle sales in the country last year.

Economic growth in South Korea has slowed sharply this year, reflecting weakening domestic sentiment and falling exports as the trade war between the US and China continued to intensify.

Bank of Korea cut its benchmark interest rate from 1.75% to 1.5% in July to help shore up consumer spending with new models launched recently by Hyundai now struggling to lift the overall market.

Most major manufacturers reported domestic sales declines in August, including Hyundai whose sales dropped 9.7% to 52,897 units; Kia saw a 1.9% fall to 43,362 units; and GM Korea volume was down 13% to 6,411 units.

Renault-Samsung was the only manufacturer to report an increase last month, of 9.3% to 7,771 units.

Overall domestic sales in the first eight months of the year were 1.2% lower at 1,004,651 units from 1,017,131 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 2.9% to 639,435 units in August from 658,373 units a year earlier, reflecting weaker domestic and overseas sales.

Total volume in the first eight months of the year was 4.2% lower at 5.15m units from 5.37m in the same period of last year.

Overseas sales, including exports and also vehicles produced overseas by Hyundai and Kia, fell by 2.1% to 520,956 units in August from 532,037 units a year earlier, reflecting continued weak demand in key developing markets including China, India and Russia. In the first eight months of the year volume was 4.7% lower at 3,663,415 units from 3,845,810 units a year earlier.

Hyundai Motor's global vehicle sales fell by 6.2% to 363,045 vehicles in August from 386,885 units a year earlier, reflecting weaker domestic and overseas sales. The brand's global sales in the first eight months of the year were down by 4.3% at 2,847,212 units from 2,975,280 units in the same period last year.

Domestic sales declined by 9.7% to 52,897 units last month from 58,582 a year earlier, despite the recent launch of new SUVs such as the Palisade, Santa Fe and the entry-level Venue, as well as the redesigned Sonata passenger car.

Sales in the first eight months of the year were still 5.1% higher at 497,296 units from 473,330 units previously. 

Overseas sales fell by 5.5% to 310,148 units in August from 328,303 a year earlier and were down by 5.2% at 2,257,041 units year to date from 2,381,237 units previously, reflecting declining sales in developing markets such as China, India and Russia. 

Hyundai hopes its sales in the US will pick up momentum in the second half of the year following the launch of the Palisade in June. The company also launched its new Venue entry level SUV in its domestic market in July and will roll out the model globally throughout the second half of the year. 

Kia Motors' global sales rose by 2.1% to 228,871 vehicles in August from 224,233 units a year earlier, reflecting stronger overseas sales. In the first eight months of the year, the brand's global sales were down by 1.9% at 1,808,100 units from 1,842,823 units previously.

Domestic sales also fell by 1.9% to 43,362 units in August from 44,200 units a year earlier and by almost 7.1% to 333,312 units in the first eight months of the year from 358,940 units previously.

Overseas sales rose by 3% to 185,509 units last month from 180,033 units a year earlier, but were down by 0.7% at 1,473,694 units year to date from 1,483,923 units, with continued weakness in China offsetting a pick-up in sales in the US and Europe.

The company is stepping up its new model launches this year with a redesigned Soul SUV and the global rollout of the new Seltos entry level SUV.

GM Korea's global sales rose by 6.1% to 24,517 vehicles in August from 23,101 units a year earlier, with weaker domestic sales more than offset by a sharp rise in exports. Sales in the first eight months of the year were still 6.2% lower at 287,540 units from 306,533 in the same period of last year.

Domestic sales continued to drop sharply last month, by 13% to 6,411 units from 7,391 units a year earlier, despite the recent launch of the new locally made Trax compact crossover vehicle and other imported models.

Sales in the first eight months of the year were almost 17% lower at 48,763 units from 58,688 units previously.

Exports jumped by over 15% to 18,106 units, albeit from weak year earlier volume of 15,710 units, helped by higher shipments of the Trax and Equinox models, but were still down by 3.6% at 238,777 units year to date from 247,645 units in the same period of last year.

GM Korea launched the US-made Colorado pickup truck last month, with deliveries expected to start in October, while the Traverse SUV is also scheduled for introduction in September. This will help strengthen its line-up in a market dominated by Hyundai and Kia. The company also plans to begin local production of the Trailblazer SUV by the end of the year.

GM Korea has been hit by a series of partial strikes over the last month over wages but this is not expected to have affected its market performance due to overcapacity despite the closure of the Gunsan plant last year.

Renault-Samsung, which is 80%-owned by Renault, saw its global sales increase by 2% to 12,987 units in August from weak year earlier sales of 12,733 units, reflecting higher domestic volumes. Overall sales in the first eight months of the year were more than 27% lower at 114,705 autos from 157,313 in the same period of last year.

Domestic sales rose by 9.3% to 7,771 units last month from 7,108 units a year earlier, lifted by strong local demand for the QM3 and QM6 SUVs, but were still almost 9% lower at 52,585 units year to date compared with 57,630 units previously. Exports fell by 7.3% to 5,216 units from already depressed year earlier sales of 5,625 units and by more than 39% to 60,464 units in the eight month period from 99,686 units previously.

The company blamed slowing global economic growth for the weak overseas demand which has prompted Nissan to cut its production allocation of SUVs at the plant to 60,000 units this year from 100,000 units last year. The company is expected to discuss redundancies when it next holds talks with unions, expected some time this month.

Ssangyong Motor, majority-owned by Mahindra & Mahindra, reported a 12% drop in global sales to 10,015 vehicles in August from 11,349 units a year earlier, reflecting weaker domestic and export sales. In the first eight months of the year the brand's sales were more than 2.4% lower at 88,702 units from 90,925 units previously.

Domestic sales declined by over 11% to 8,038 units last month from 9,055 units a year earlier, but were still up by 3.3% at 72,695 units year to date from 70,383 units a year earlier. Exports fell by over 16% to 1,977 units year on year from 2,366 units and were down by close to 13% at 18,383 units year to date from 21,064 units.

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

South Korea carmakers: domestic/overseas sales by brand, YTD 2019

Brands Domestic JulyAugustOverseas JulyAugustGlobal JulyAugustYTD Total
Hyundai 60286528972921823101483524683630452836312
Kia47080433621788221855092259022288711807006
GM Korea6754641125097181063185124517287540
Renault-Samsung83087771756652161587412987113049
Ssangyong8707803820791977107861001592374
Total1311351184795057465209566368816394355136311
Sources: www.AsiaMotorBusiness.com, industry sources