Compact Cars Struggle to Find a Turning Point... Will the AX1 Become the Savior?

[Asia Economy Reporter Yoo Je-hoon] As the compact car market, which broke the 100,000-unit barrier last year, struggles to find signs of a turnaround, attention is focused on whether Hyundai Motor Company's soon-to-be-released new compact car model can become a savior.

According to the Korea Automobile Manufacturers Association (KAMA) on the 29th, the cumulative compact car sales from January to July this year totaled 55,534 units, a 2.27% decrease compared to the same period last year. At this rate, it is highly likely that the 100,000-unit barrier will not be surpassed again this year.

The outlook varied by model. The leading models, Kia Morning and GM Korea Spark, saw sales drop by 12.3% and 24.1%, respectively. Although the Ray, which succeeded in reversing the trend due to the auto camping boom, recorded a 38.0% increase with 21,843 units sold, it was not enough to reverse the overall decline in compact car sales, according to industry evaluations.

Meanwhile, the industry is paying attention to Hyundai’s new compact car model 'AX1 (project name)', which will begin mass production in mid-next month and is scheduled for release in the second half of the year. The AX1, which will be produced under consignment by Gwangju Global Motors (GGM), is Hyundai’s first new compact car in 19 years since the Atos, and the model name is likely to be 'Casper'. The compact car market has seen no significant new models for several years due to profitability concerns.

So far, the AX1’s length, width, and height are 3595mm, 1595mm, and 1575mm, respectively, making it somewhat smaller than the small SUV Venue but the largest among compact cars except for the Ray. Additionally, the powertrain is known to combine Kia’s 76-horsepower 1.0ℓ Smartstream engine used in compact cars with a 4-speed automatic transmission.

The AX1 is attracting market expectations as it is a sports utility vehicle (SUV) model, which currently leads the automobile market. The combination of the space efficiency of an SUV and the economy of a compact car is expected to attract the younger generation’s interest. Industry insiders believe the success of the AX1 depends on quality and pricing policy. An industry official said, "Since it is produced under consignment, quality control is crucial," adding, "If the price is set in the low to mid-10 million KRW range, consumers interested in 'value for money' will increase."

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