South Korean sales fall by 15% in May, overseas sales surge - Just Auto
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South Korean sales fall by 15% in May, overseas sales surge

03 Jun 2021 (Last Updated June 3rd, 2021 11:07)

Vehicle production in Korea in May continued to be affected by the chips shortage, while domestic demand also slumped - undermined by surging coronavirus infections in the country. On the upside, export demand is strongly up.

South Korean sales fall by 15% in May, overseas sales surge

Domestic vehicle sales by South Korea’s five main automakers combined declined by 15% to 124,145 units in May 2021 from 146,130 units a year earlier, 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 as sales of imported vehicles which are covered in a separate report released later in the month. Together these accounted for close to 15% of total vehicle sales last year.

Vehicle production in the country continued to be affected by the global shortage of semiconductors in May, while overall demand appears to be also weakening as domestic confidence is undermined by surging coronavirus infections in the country. The government said it will extend the current vehicle sales tax discount, of 3.5% instead of 5.0%, until the end of the year to help support the local market.

All vehicle manufacturers reported falling sales in May, with market leader Hyundai reporting a more than 12% drop to 62,056 units while Kia Corporation saw its sales fall by just over 6% to 47,901 vehicles. Much sharper declines were reported by the smaller brands, with GM Korea’s sales falling by over 23% to 4,597 units, Renault-Samsung by over 56% to 4,635 units and Ssangyong by almost 35% to 4,956 units.

Overall domestic sales in the first five months of the year were down by just under 1% at 618,323 units from 623,670 units in the same period of 2020.

Global sales among the country’s “big-five” automakers, including vehicles produced overseas by Hyundai and Kia, increased by almost 37% to 604,709 units in May 2021 from weak year-earlier sales of 440,281 units, reflecting the continued strong rebound in overseas sales. Total vehicle sales in the first five months of the year were up by close to 23% at 3,050,029 units from 2,487,991 units a year earlier.

Overseas sales rebounded by 66% to 480,564 units last month from depressed year-earlier sales of 289,952 units, as demand in key markets including the Americas and Russia rebounded strongly from depressed year-earlier levels. Overseas sales in the first five months of the year were up by over 31% at 2,439,269 units from 1,860,828 units in the same period of last year.

Hyundai Motor’s global sales jumped by almost 43% to 323,129 vehicles in May from 226,456 units a year earlier, as key overseas markets continued to rebound from depressed year-earlier levels. Total sales in the first five months of the year were up by close to 29% at 1,672,660 units from 1,297,513 units in the same period of last year, led by SUVs such as the Palisade, Tucson, Santa Fe and the Genesis luxury brand. The company is well on its way to achieving its 2021 target of 4.16 million global sales, an 11% increase on last year’s 3.74 million units, with electric vehicle models based on its dedicated E-GMP platform expected to make an impact starting with the Ioniq 5 model. Domestic sales declined by over 12% to 62,056 units last month from 70,810 units a year earlier, while cumulative five-month sales were still up by close to 6% at 317,668 units from 300,913 a year earlier, driven by strong demand for the Grandeur, Avante sedans and the new Tucson SUV.

Overseas sales jumped by almost 68% to 261,073 units in May from 155,646 units a year earlier, driven by improving conditions in a number of key markets including in North and South America and Russia. In the first five months of the year overseas sales increased by 36% year-on-year to 1,354,972 units from 996,600 units.

Kia’s global sales rose by over 49% to 245,994 vehicles in May 2021 from 164,893 units a year earlier, driven mainly by a strong surge in overseas sales. Total volumes in the first five months of the year were up by 24% at 1,183,565 units from 954,173 units a year earlier, with the Sportage SUV its best-selling model globally.

Domestic sales fell by 6.4% to 47,901 vehicles last month from 51,181 units a year earlier, but were up by 5% at 229,104 units year-to-date from 218,281 units- lifted by strong demand for the Sorento and the Carnival MPV.

Overseas sales jumped by close to 75% to 198,093 units in May from weak year-earlier sales of 113,452 units, resulting in an almost 30% rise in the cumulative five-month total to 954,461 units from 735,892 units – driven by rebounding demand in North America.

The company expects new electric vehicle models such as the EV6 and the new K8 sedan, due out in the second half of the year, will help it reach its full-year target of a 12% sales rise to 2.92 million global sales from just over 2.6 million units in 2020.

GM Korea’s global sales continued to drop sharply in May, by close to 34% to 16,428 vehicles from an already weak 28,749 units a year earlier, reflecting sharply lower domestic sales and exports. The global semiconductor shortage had some impact on the company’s production volumes, but most of the decline is attributable to weak demand. In the first five months of the year global sales declined by over 11% to 127,907 units from 144,089 units previously.

Domestic sales plunged by over 23% to 4,597 units last month from 5,993 a year earlier and were down by close to 14% at 27,420 units in the first five months of the year from 31,743 units. Exports fell by almost 37% to 11,831 units in May from 18,785 a year earlier and by over 7% to 100,487 units year-to-date from 108,375 units.

Renault-Samsung, 81%-owned by France’s Renault, saw its global sales fall by over 13% to 10,348 vehicles in May from weak year-earlier sales of 11,929 units, reflecting plummeting domestic sales. In the first five months of the year global sales were down by over 22% at 41,760 units compared with 53,406 units in the same period of last year.

Domestic sales continued to plunge last month, by over 56% to 4,635 units from 10,571 units a year earlier and were down by over 44% at 23,210 year-to-date from 41,574 units, as the automaker faced increasingly tough competition from domestic rivals Hyundai and Kia.

Exports continued to rebound strongly in May, however, by more than fourfold to 5,713 units from depressed year-earlier sales of 1,358 units, as the company continued to ramp up shipments of the XM3 SUV to Europe. In the first five months of the year exports were up by close to 57% at 18,530 units from 11,832 units.

Ssangyong Motor’s global sales increased by 6% to 8,750 vehicles in May from 8,254 units a year earlier, despite tough operating conditions after the company entered court receivership in April. Global sales in the first five months of the year were still down by over 19% at 31,660 units from 39,206 previously.

Ssangyong filed for bankruptcy on 21st December 2020 and began a debt-rescheduling process in April after management failed to find a buyer for the company. Production has been affected by a shortage of components for long periods this year, with a number of suppliers refusing deliveries due to significant payment backlogs.

Domestic sales fell by almost 35% to 4,956 units last month from 7,575 a year earlier and by 33% to 20,901 units in the first five months of the year from 31,109 previously. Exports surged to 3,854 units in May from a depressed 711 units a year earlier and were up by over 33% at 10,819 units year-to-date from 8,129 units.

South Korean carmakers: domestic/overseas sales by brand, May 2021

BrandsDomesticOverseasGlobal
Hyundai 62056261073323129
Kia 47901198093245994
GM Korea 45971183116428
Renault-Samsung4635571310348
Ssangyong495638548810
Total124145480564604709