"Only Large and Expensive Cars Sell Well"... Domestic Car Sales Down 2.6% in First Half of Year

Domestic Car Sales Decline in First Half, While Large, Luxury, and Imported Car Sales Increase
Demand Sophistication, Polarization Deepens, Polarization Patterns by Manufacturer

Genesis GV80

[Asia Economy Reporter Changhwan Lee] Domestic car sales in the first half of this year decreased compared to the same period last year, while the popularity of expensive vehicles such as large cars and imported cars rather increased.

According to the '2021 First Half New Vehicle Registration Status Analysis' report released by the Korea Automobile Manufacturers Association (KAMA) on the 3rd, the number of domestic car sales in the first half of this year was 924,000 units, down 2.6% compared to the same period last year.

Looking at the main characteristics of the domestic car market in the first half, sales increased mainly for high-priced vehicles such as large SUVs (Sports Utility Vehicles), hybrid cars, and imported cars due to demand upgrading and polarization intensification.

In the first half, large SUVs increased by 52.6% compared to the same period last year to 200,000 units, and hybrid cars increased by 71.3% to 113,000 units, with about 40% of this year's passenger car sales concentrated on these two types.

This was mainly attributed to the expansion of demand upgrading due to recent income polarization and the increase in domestic travel caused by COVID-19, such as camping.

While domestic car sales decreased by 6.2% in the first half, imported cars increased by 17.9% compared to the same period last year, deepening the polarization.

In the case of domestic cars, Hyundai and Kia maintained last year's level with the introduction of new large SUVs and hybrid cars, but the three foreign-invested companies?Korea GM, Renault Samsung, and SsangYong?decreased by 34.9% due to a lack of new models.

Imported cars recorded the highest-ever sales overall, including ultra-luxury imported cars priced over 400 million KRW.

The decline of internal combustion engine vehicles such as gasoline and diesel cars continued, and electric vehicles maintained their growth trend with market share nearly doubling, which was also a major feature.

Electric vehicles, mainly imported cars, nearly doubled in market size, expanding market share from 2.3% to 4.3%. Among them, 25,000 electric passenger cars were registered, a 51.0% increase compared to the previous year. The share of imported cars increased by 7 percentage points (p) from 53% last year to 60% this year in terms of volume, and the market share in terms of value was found to be close to 70%.

The continuous expansion of imported car market share also continued. Imported car sales in the first half reached 167,000 units, with market share rising 3.1%p from 15.0% in the same period last year to 18.1%, and the value exceeded 30%, marking a record high.

Jung Manki, chairman of KAMA, said, "The sluggish sales of domestic cars are largely due to corporate factors such as labor disputes and lack of new model introductions by the three foreign-invested companies," but added, "Considering that some of it is also due to domestic disadvantages compared to imported cars, such as differences in the timing of the special consumption tax imposition and the prohibition of domestic automakers' participation in the used car market, it is urgent for the government to improve market conditions so that domestic cars can compete equally with imported cars."

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