'-21.7%' vs '5.3%'... COVID Shock Hits Domestic Cars, Why Did Imported Cars Avoid It?

Chevrolet's Shift to Imported Cars and Last Year's 'Sales Slump' Base Effect

Chevrolet Colorado (Photo by Chevrolet)

[Asia Economy Reporter Kim Ji-hee] Last month, the domestic imported car market grew by more than 5% compared to the previous year. While the domestic completed car industry was hit hard by the novel coronavirus infection (COVID-19), the imported car market performed relatively well.

According to the Korea Automobile Importers & Distributors Association (KAIDA) on the 7th, the number of newly registered imported passenger cars in February this year was 16,725 units. This is a 5.2% decrease compared to January, but a 5.3% increase compared to the same period last year. The cumulative number up to February this year was 34,365 units, an increase of 0.8% compared to the same period last year.

Considering that domestic sales of the five domestic completed car companies fell by more than 20% during this period, this is regarded as a decent performance. Last month, the domestic sales performance of the five domestic completed car companies, including Hyundai Motor Company and Kia Motors, recorded 81,722 units, down 21.7% compared to the same period last year. This is the lowest figure since 2005 for February, and the lowest monthly sales volume in 11 years since January 2009 (73,537 units) right after the financial crisis.

The background for the growth of the imported car market despite major adverse factors was the strong sales of Chevrolet, which transformed into an imported car brand. Chevrolet, which joined the Korea Automobile Importers & Distributors Association at the end of last year and declared the brand's transition to imported cars, registered 973 units in February alone. This corresponds to the 'top 3' in sales rankings by imported car brand, following Mercedes-Benz and BMW. The pickup truck model Colorado (433 units) accounted for nearly half of the brand's total sales volume.

There is also a base effect due to poor sales performance last year. Domestic imported car sales in February last year recorded 15,885 units, the lowest since July 2016 (15,730 units). Since 2017, the only month when imported car monthly sales were around 15,000 units was February last year. At that time, the number of business days was significantly reduced due to the Lunar New Year holidays, and the shortage of supply from some brands such as Volkswagen, which was in a shutdown state, intensified, causing sales to drop sharply.

There was no 'COVID-19 shock' until February, and there is also an analysis that the impact on the imported car market will become full-scale from this month. Sales performance is reflected at the time of delivery and handover, not at the time of vehicle contract. For this reason, it cannot be ruled out that the impact of COVID-19 has not yet been reflected in last month's performance for imported cars, which generally have a relatively long waiting period until actual delivery. The industry estimates that it usually takes about 1 to 3 months from the occurrence of variables in the imported car market until actual sales performance is affected.

An industry official said, "Imported cars are also significantly affected by COVID-19, such as a decrease in customers visiting showrooms," adding, "For now, we are preparing by strengthening promotions and marketing, but the real concern is from next month when the shock of COVID-19 will be fully reflected."

This content was produced with the assistance of AI translation services.