Shrunken Domestic New Car Market... May Sales Down 10% Year-on-Year

Hyundai Motor and 4 Other Domestic Car Makers Sell 116,552 Units
High Interest Rates and Rising New Car Prices... Electric Vehicle Demand Remains Weak

Last month, the domestic sales volume of five Korean automakers decreased by double digits compared to the same period last year. This is attributed to weak demand for electric vehicles and a decline in consumer sentiment for new cars due to the burden of high interest rates.

According to the sales performance announced by each company on the 3rd, the domestic sales volume of the five automakers, including Hyundai Motor Company, totaled 116,552 units. Compared to over 130,000 units sold in May last year, this represents a 10.6% decrease. The year-on-year decline in domestic sales has continued for four consecutive months.

Vehicles awaiting delivery in front of Kia Gwangmyeong Plant
[Photo by Yonhap News]

Except for Renault Korea, all companies sold fewer vehicles than a year ago. Hyundai Motor Company’s sales dropped by 9.4%, and Kia’s by 8.3%. Sales at Korea GM fell by 50.8%, and KG Mobility’s by 16.8%. Although Renault Korea launched a major promotional campaign starting in April after changing its emblem, its performance is still not considered satisfactory. Renault Korea’s domestic sales last month were 1,901 units, a relatively low level compared to the past.

Compared to the sales volume in April, the total also decreased. The domestic sales volume of the five Korean automakers in April was 118,978 units, down about 2% in one month.

The automaker industry had anticipated a challenging domestic new car market throughout this year. Hyundai Motor Company and Kia, which together occupy nearly 80% of the domestic market, even lowered their domestic sales targets compared to last year. As the high interest rate environment continues, the cost burden in purchasing new cars is significant, making consumers reluctant to open their wallets. The sharp rise in raw material prices and the supplier-dominant market over the past two to three years have also contributed to the steep increase in new car prices.

The electric vehicle chasm (temporary demand stagnation) is also prominent. Hyundai’s Ioniq 5 and Ioniq 6 saw sales drop by 34% and 66%, respectively, compared to the previous year. Kia’s EV6 also decreased by 27%. In particular, the small electric trucks (Porter and Bongo electric vehicles) from Hyundai and Kia, which accounted for a significant portion of electric vehicle sales, saw sales fall by more than 60% compared to a year ago.

Cars waiting for export shipment at Incheon Port
[Photo by Yonhap News]

The fact that Kia’s mid-size sports utility vehicle (SUV) Sorento, the best-selling model in the domestic market, sold only 7,487 units is also cited as a sign of the domestic slump. Typically, best-selling models sell around 10,000 units.

Including export volumes, the total sales performance of the five automakers was similar to the same period last year. Last month, total sales reached 686,268 units, a 0.2% increase compared to a year ago. By company, Hyundai Motor Company’s sales increased by 1.9%, while Kia’s decreased by 2.1%. Korea GM’s sales rose by 27.2%, whereas KG Mobility and Renault Korea saw declines of 17.5% and 55.9%, respectively.

A Hyundai Motor Company official stated, "To flexibly respond to an uncertain business environment, we plan to strengthen production and sales systems tailored to local demand and policies, and respond flexibly to market changes by region."

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