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August 3, 2021

South Korean sales fall in July

Semiconductor shortages and surging Covid infection affected sales last month.

By Graeme Roberts

Domestic sales by South Korea’s five main automakers combined dropped by over 24% to 123,512 units in July 2021 from 144,422m 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, including Tata-Daewoo and Daewoo Bus Corporation, as well as sales of imported vehicles which will be covered in a separate report released later in the month. Together these accounted for close to 15% of total vehicle sales in the country last year.

Domestic sales in July continued to be affected by the global shortage of semiconductors, which continued to disrupt vehicle production, and by surging coronavirus infections in the country. 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.

Only Kia reported an increase in domestic sales last month, of just 2.4% to 48,160 vehicles while Hyundai sales dropped by close to 23% to 59,856 units, GM Korea by over 30% to 4,886 units, Renault-Samsung by 21% to 5,610 units and Ssangyong sales were down by close to 16% at 5,652 units.

Overall domestic sales in the first seven months of the year were down by 7.2% at 876,616 units from 944,511 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 slightly to 589,643 units in July 2021 from weak year earlier sales of 590,566 units, with a sharp decline in domestic sales almost entirely offset by higher overseas sales.

Total vehicle sales in the first seven months of the year were still up by almost 18% at 4,297,189 units from 3,649,037 units previously.

Overseas sales continued to rise last month, albeit by just 4.5% to 466,131 units from 446,144 units a year earlier, while year to date volume was almost 23% higher at 3,428,156 units from 2,791,650 units as demand in key markets such as Europe, South America and Russia rebounded strongly from depressed year earlier levels.

Hyundai Motor global sales fell by 2.4% to 309,901 vehicles in July from 317,403 units a year earlier, reflecting a sharp fall in domestic sales which was offset in part by continued growth in overseas sales. Global sales in the first seven months of the year were still up by close to 22% at 2,341,094 units from 1,924,743 units in the same period of last year, driven by strong demand for SUVs such as the Palisade, Tucson, Santa Fe and the Genesis luxury brand. The automaker is targeting global sales of 4.16m vehicles in 2021, an 11% increase on last year’s 3.74m units.

Domestic sales dropped by close to 23% to 59,856 units last month from 77,381 units a year earlier, with deliveries affected by tight supplies of semiconductors. Cumulative seven-month sales were down by 3.5% at 445,951 units from 461,994 a year earlier.

Overseas sales rose by just 4.2% to 250,045 units in July from 240,022 units a year earlier, with volumes also affected by the chip shortage. Cumulative seven-month sales were still up by almost 30% at 1,895,143 units from 1,462,749 units a year earlier, driven by rebounding sales in North and South America, Europe and Russia.

Kia global sales rose by just under 9% to 241,399 vehicles in July 2021 from 222,119 units a year earlier, driven mainly by a continued rebound in overseas sales. Total volumes in the first seven months of the year were up by over 21% at 1,678,826 units from 1,387,187 units a year earlier, with the Sportage SUV its best-selling model globally.

Domestic sales rose by 2.4% to 48,160 vehicles last month from 47,050 units a year earlier and were slightly higher at 326,544 units year-to-date from 325,336 units previously – underpinned by strong demand for the Sorento and the Carnival MPV.

Overseas sales increased by over 10% to 193,239 units in July from weak year earlier sales of 175,069 units, resulting in a 27% rise in the cumulative seven month total to 1,352,282 units from 1,061,851 units driven by rebounding demand in Europe and North America.

The company launched the EV6 electric vehicle this week and has stepped up promotions of its new K8 sedan, as it targeted a 12% rise in full year global sales to 2.92m units from just over 2.6m in 2020.

GM Korea global sales plunged by almost 45% to 19,215 vehicles in July 2021, from 34,632 units a year earlier, with both domestic and export sales impacted by the global semiconductor shortage and by the recent surge in COVID-19 infections. In the first seven months of the year its global sales declined by over 13% to 173,998 units from 200,670 units previously.

Domestic sales dropped by over 30% to 4,886 units last month from 6,988 units a year earlier and were down by almost 21% at 38,046 units in the first seven months of the year from 48,080 units.

Exports plunged by over 48% to 14,329 units in July from 27,644 units a year earlier and by almost 11% to 135,952 units year-to-date from 152,653 units.

Renault-Samsung reported a 24% jump in global sales to 11,033 vehicles in July from weak year-earlier sales of 8,923 units, reflecting a strong surge in overseas sales. In the first seven months of the year global sales were still down by close to 13% at 66,959 units compared with 76,588 units previously.

Domestic sales continued to fall last month, by almost 21% to 4,958 units from an already weak 6,301 units a year earlier and were down by over 45% at 33,778 year-to-date from 61,543 units, as the automaker faced increasingly tough competition from domestic rivals Hyundai and Kia and from imports.

Exports continued to rebound strongly in July, with volumes surging to 6,075 units from 2,622 units a year earlier as the company stepped up shipments of the XM3 to Europe. In the first seven months of the year exports more than doubled to 33,161 units from 15,046 units.

Ssangyong Motor global sales rose by 8.5% to 8,095 vehicles in July from 7,459 units a year earlier, helped by a rebound in overseas sales, but were still down by over 15% at 48,229 units in the first seven months of the year from 56,846 previously.

Domestic sales fell by close to 16% to 5,652 units last month from 6,702 units a year earlier and by over 32% to 32,277 units in the first seven months of the year from 47,577 units. Exports continued to rebound in July, to 2,443 units from 757 units a year earlier and were up by almost 84% at 17,116 units year-to-date from 9,321 units.

At the beginning of August the automaker’s administrators, appointed by the Seoul Bankruptcy Court in April after the company filed for bankruptcy last December, were scheduled to begin reviewing bids to take over the company. It was understood Ssangyong’s US importer HAAH Automotive Holdings had submitted a bid for the company.

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