Domestic Cars, 'Corona Shock' Escape Signal... Domestic Sales Expected to Reach 1.6 Million Units Annually

Steep Growth in Domestic Sales
Possibility of 1.6 Million Units Annually in 4 Years

Overseas Sales Also Rapidly Recovering

[Asia Economy Reporter Kim Ji-hee] The domestic finished car industry is rapidly recovering from the 'COVID-19 shock' thanks to the growth of the domestic market and the recovery of overseas sales. In particular, as domestic sales have sharply increased, expectations for achieving 1.6 million units annually for the first time in four years are also rising.

According to the industry on the 6th, five domestic finished car companies (Hyundai Motor Company, Kia Motors, Korea GM, Renault Samsung Motors, Ssangyong Motor) sold 138,530 units in the domestic market last month, an increase of 23.3% compared to the same period last year. Despite the COVID-19 crisis, domestic sales, which had been increasing year-on-year, dipped once in August due to the reduction of the special consumption tax cut benefits but rebounded again in September. Accordingly, the cumulative sales volume from January to September this year was recorded at 1,194,888 units.

With domestic sales approaching 1.2 million units through September this year, there is also a forecast that domestic cars excluding imported cars could exceed 1.6 million units annually this year. Especially since monthly performance increased compared to last year in all periods except August after March, if the current trend continues, it is analyzed that this is not an impossible figure. In the past 10 years, domestic car domestic sales exceeded 1.6 million units annually only once in 2016 (1,600,154 units). Since then, sales have continuously declined, falling to the early 1.5 million units level last year.

The strong domestic sales are largely due to the successive hits of new cars introduced by Hyundai and Kia. At Kia Motors, two models, Carnival (11,030 units) and Sorento (9,151 units), attracted sales close to 20,000 units, and Hyundai also saw good sales of new cars such as Avante (9,136 units) and Genesis G80 (6,040 units).

Excluding Hyundai Kia Motors, the 'Small 3' also showed a positive trend by overcoming a long slump. The most favorable atmosphere is at Korea GM. Thanks to the addition of the new Trailblazer, domestic sales last month jumped 17.9% compared to the same period last year. Ssangyong Motor's domestic sales, which actively engaged in marketing such as the release of special editions, also increased by 13.4% compared to the same period last year.

Overseas sales are also rapidly recovering, recording a single-digit decline rate for the first time since the COVID-19 outbreak. After falling more than 60% year-on-year in April, the decline narrowed steadily to -32.6% in June, -14.1% in July, -11.7% in August, and -2% last month. If this trend continues, overseas sales, which have been a drag on finished car performance throughout this year, are expected to recover to levels similar to last year in the fourth quarter.

The combined domestic and overseas sales performance has already overcome the COVID-19 shock. Last month, the total sales performance of Kia Motors and Korea GM already greatly exceeded the same period last year. The global sales of the five domestic finished car companies in September were 678,549 units, an increase of 2.3% compared to the same period last year. This is the first time global sales have escaped the downward trend compared to last year.

Although the variable of overseas COVID-19 resurgence remains, the domestic market is expected to maintain a solid upward trend in the fourth quarter as well. This is because industry promotions usually concentrate at the end of the year, and new car launches such as the new Genesis G70 are still pending.

An industry official said, "Since the end of the year is the time when promotions by each finished car company are most active, there is a possibility that the upward trend will continue," adding, "Also, there are quite a few models with remaining new car effects such as Carnival and Sorento, so it is expected to firmly support domestic sales."

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