Five Domestic Automakers' Domestic Sales Growth Slows Due to Reduced 'Excise Tax Effect' (Comprehensive)

[Asia Economy Reporter Su-yeon Woo] Since the individual consumption tax cut benefits were reduced starting July this year, the domestic sales growth of the five domestic automakers slowed down last month. Until June, the domestic sales growth rate exceeded 40% year-on-year, but it dropped to the 10% range in July.

According to the five domestic automakers (Hyundai, Kia, Korea GM, Ssangyong, Renault Samsung) on the 3rd, their domestic sales in July reached 144,422 units, a 10% increase compared to the same period last year. Although sales still increased year-on-year, the growth rate significantly slowed compared to June, when domestic sales exceeded 170,000 units.

This is due to the government's reduction of the individual consumption tax benefit (from a 3.5% to 1.5% cut), which had been temporarily expanded due to the COVID-19 pandemic. Consumers who wanted to take advantage of the tax cut rushed to buy in June, causing explosive sales, and as a result, sales slowed relatively in July.

By company, Hyundai sold 77,381 units, about a 28% increase year-on-year, and Korea GM recorded sales close to 7,000 units, a slight increase of about 3%. However, all five companies showed a decrease in sales compared to the previous month.

Last month, overseas sales of the five automakers totaled 439,620 units, a 14% decrease year-on-year but about an 18% increase compared to the previous month. Due to the impact of COVID-19, overseas sales of the five companies had dropped to around 140,000 units in April but gradually recovered from May, reaching about 450,000 units in July, the level of January this year.

Sales Performance of 5 Domestic Complete Car Manufacturers in July 2020 (Unit: Units)

◆ Hyundai, Continued 'Genesis Effect' in July

Hyundai sold 77,381 units in the domestic market last month, a 28.4% increase compared to the same period last year. Sedans led the performance with the Grandeur (including 3,618 hybrid models) selling 14,381 units, followed by the Avante with 11,037 units, and the Sonata (including 627 hybrid models and 1,644 LF models) with 5,213 units. Total sedan sales reached 31,209 units.

The premium brand Genesis showed strong popularity with the G80 (including 40 DH models) selling 6,504 units. Following were the GV80 with 3,009 units, G90 with 1,117 units, and G70 with 489 units, totaling 11,119 units sold, marking four consecutive months of over 10,000 units sold.

◆ Kia, Maintaining Status Quo Both Domestically and Overseas

In July, Kia sold 219,901 units globally, a 3% decrease compared to the same period last year. Domestic sales decreased slightly by 0.1% to 47,050 units, and overseas sales dropped 3.7% to 172,851 units, maintaining a steady performance year-on-year.

Last month, Kia sold 47,050 units domestically, with about 20% of the total driven by the Sorento. The Sorento sold 9,488 units last month, ranking first in Kia's monthly sales for four consecutive months.

Despite the prolonged COVID-19 situation, Kia performed well overseas, with only a 3.7% decrease year-on-year. By model, the Sportage led overseas sales with 29,677 units, followed by the Seltos with 24,275 units and the K3 (Forte) with 21,068 units.

◆ Korea GM, Solid Domestic and Export Performance Thanks to Trailblazer

Korea GM's domestic sales in July reached 6,988 units, a 3.5% increase year-on-year, with the Trailblazer leading Chevrolet's overall domestic performance by selling 2,494 units. The Traverse and Colorado sold 329 and 369 units respectively, confirming steady popularity in the market.

Exports last month totaled 27,644 units, about a 10% increase year-on-year. This was also driven by the start of Trailblazer exports, with RV models increasing about 30% year-on-year to 22,254 units, accounting for the majority of total exports.

◆ Ssangyong, Domestic Sales Down 23% Due to Reduced Tax Benefits

Ssangyong sold 6,702 units domestically and 787 units overseas in July, totaling 7,489 units globally. This performance reflects a 23% decrease in domestic sales and a 62% drop in exports compared to the previous year.

This result is due to the lack of recovery in global demand amid the COVID-19 impact and the reduction of domestic stimulus measures such as the individual consumption tax cut. In the domestic market, the Korando increased by 33% year-on-year to 1,363 units, while other models like Tivoli, G4 Rexton, and Rexton Sports all showed a decline.

◆ Renault Samsung, Rebound with XM3 Export Launch... Domestic Sales Decline

Renault Samsung sold 6,301 units domestically and 2,622 units overseas in July, totaling 8,923 units. Domestic sales decreased 24% year-on-year, and exports dropped 65%.

Exports showed a more than 340% increase compared to the previous month, thanks to the first export shipment of the XM3 at the end of July and the steady popularity of the QM6. However, in the domestic market, XM3 sales dropped significantly to about 2,000 units per month in July due to the reduction of the individual consumption tax cut benefits and recalls caused by engine stalling issues.

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