Demand for Korea cars is low at home, abroad

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Demand for Korea cars is low at home, abroad

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Korean auto sales shrank 0.5 percent on-year in July, due to sluggish domestic demand and a global slowdown, industry data showed yesterday.

The combined sales of the country’s five carmakers, led by leader Hyundai Motor, came to 621,702 vehicles last month, compared with 625,083 units a year earlier, according to data released by the companies.

Their domestic sales fell 4.5 percent on-year to 121,426 units, while overseas shipments edged up 0.5 percent to 500,276.

The other of the nation’s five automakers are Kia Motors, GM Korea, Renault Samsung and Ssangyong Motor. For the first seven months of the year, the cumulative sales of the five firms climbed 7.6 percent on-year to 4.74 million units. Their seven-month domestic sales fell 5.7 percent on-year to 812,672 units, while overseas sales added 10.8 percent to 3.93 million units.

“Persistent weak demand and a decrease in work days due to partial walkouts and summer vacations led to this year’s slowest sales growth,” said Hyundai Motor in a statement.

Unionized workers of Korean automakers, including Hyundai and its smaller affiliate Kia, held partial walkouts on July 13 and 20 as part of a nationwide strike led by the Korean Confederation of Trade Unions, the country’s biggest umbrella union.
Hyundai officials said a production stoppage on July 13 led to the production loss of an estimated 4,300 vehicles worth 88 billion won ($76.4 million), and Kia suffered a loss of 2,700 vehicles worth 47 billion won.

Hyundai and Kia reported global sales gains of 3.8 percent and 1 percent, respectively. The companies’ overseas sales rose 7 percent and 8 percent on-year last month, respectively.

GM Korea’s outbound shipments fell 9 percent on-year in July, while Renault Samsung’s exports sank 31.2 percent and Ssangyong saw a 22.9 percent decline in overseas sales.

The domestic market was cool in July as four of the five manufacturers saw drops in domestic sales. Only Hyundai reported a 0.1 percent gain in sales at home, the slowest pace of this year. Domestic sales of Kia, the second largest carmaker, slid 1 percent on-year to 40,300 units, and No. 3 player GM Korea saw a 7.7 percent drop with 12,001 units sold.

Renault Samsung was the biggest loser last month, with domestic sales plunging 49.9 percent on-year to 5,006 units. It managed to regain fourth spot for July after falling to fifth place in June, as Ssangyong only sold 4,164 units in the Korean market last month.

Renault Samsung’s French headquarters moved actively to remedy the sales deadlock in the domestic market. Last month, the chief executive of the Renault Group visited Seoul and said Renault Samsung will receive $160 million in investment and produce Nissan’s popular Rogue vehicle at its local plant from 2014.

Yonhap

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