Domestic sales by South Korea’s five main automakers combined fell by 6% to 107,017 units in September 2023 from 113,806 a year earlier, according to preliminary wholesale data released individually by the manufacturers.

The data did not include sales by low volume commercial vehicle manufacturers while import brands are covered separately.

The vehicle market had begun to weaken in recent months as consumers and local businesses came under increasing pressure from higher borrowing costs following last year’s sharp interest rate hikes, from 1.25% to 3.5% currently.

Strong market growth seen in the first half of 2023 was driven mainly by an easing of last year’s supply chain bottlenecks which allowed automakers to catch up with order backlogs, and also significant new model activity, particularly by the leading domestic automakers.

In the first nine months of the year, domestic vehicle sales were still up 8% at 1,090,614 units from 1,010,868 units a year ago. The market was lifted mainly by Hyundai which reported a 13% sales rise to 563,519 units, and by Kia with an 8.5% increase to 429,927 units. GM Korea sales were down just slightly at 29,056, underpinned by the introduction of the new Trax crossover model at its Changwon plant in February, while KG Mobility enjoyed a 4% rise to 50,984 units as confidence in the brand returned following last year’s takeover of Ssangyong.

Renault Korea, which is struggling to keep pace with rising competition in this market, reported a 57% plunge in local deliveries to 17,128 units year to date (YTD).

Global sales by the five big automakers, including vehicles produced overseas by Hyundai and Kia, increased 2% to 673,705 units in September from 661,619 units a year earlier, while YTD sales were 10% higher at 5,987,812 from 5,431,115 units, helped by improved supplies of semiconductors following last year’s shortages.

Overseas sales increased 3% to 566,688 units last month from 547,873 units while YTD volume was 10% higher at 4,897,378 units from 4,460,004 units.