Despite Lei's Struggles, This Year Again the '100,000 Unit Barrier' for Compact Cars Remains Precarious

Hyundai's New Kei SUV Released After 19 Years, Will It Be a Breakthrough?

[Asia Economy Reporter Yu Je-hoon] Despite Kia Ray's efforts, the domestic compact car market shows no signs of a significant turnaround. If this continues, it is expected that the market will fail to surpass the 100,000-unit mark again this year, following last year. The industry believes that the new model Hyundai Motor Company plans to release by the end of this year will determine the fate of the compact car market.

According to the Korea Automobile Manufacturers Association (KAMA) on the 30th, the cumulative domestic sales of compact cars from January to May totaled 39,667 units, a 0.7% increase compared to the same period last year.

Among the models, Kia Ray's struggle stood out. Kia Ray sold a total of 15,295 units from January to May, with cumulative sales increasing by 44.1% compared to the previous year. This is attributed to the prolonged COVID-19 pandemic and the rising trend of car camping, a neologism meaning staying inside the vehicle.

However, other models failed to avoid sluggish sales. Kia Morning sales decreased by 7.9% to 15,064 units, losing its position as the number one compact car to Ray, and the Chevrolet Spark from Korea GM dropped 20.9% to 9,053 units, falling below the 10,000-unit mark.

Given this situation, there is a possibility that compact car sales will again fail to exceed 100,000 units this year. None of the three existing compact car models have any significant issues aside from the model year changes this year. The future outlook is not bright. The Spark is rumored to be discontinued. Korea GM plans to produce a new crossover utility vehicle (CUV) model at the Changwon plant, where the Spark is currently manufactured, after the third quarter of next year. If even the Spark ceases production, the domestic compact car market will inevitably shrink further.

Amid this, the last variable is Hyundai's upcoming mini sport utility vehicle (SUV) AX1 (project name), scheduled for mass production at Gwangju Global Motors (GGM) in September. This model marks Hyundai's first compact car launch in 19 years since the discontinuation of the Atos. The market has high expectations as AX1 will be released as an SUV model, which has recently gained popularity.

An industry insider said, "It remains to be seen how much AX1 can revive the shrinking compact car market," adding, "The key will be whether price and quality can be managed at an appropriate level."

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