Truck makers hit as firms make do
Sales of one-ton trucks, the kind most widely used by small businesses and logistics companies, fell 10.6 percent from January to July compared to the same period last year, according to the Korea Automobile Manufacturers Association (KAMA).
Although overall demand for automobiles dropped in the first half as car sales for commercial use dropped 8.1 percent and car sales to regular consumers decreased 5.2 percent, sales of one-ton trucks plummeted by the largest degree to 70,810 units.
Industry figures cite a growing trend of people delaying purchasing replacement trucks due to the economic downturn.
“Sales fell mostly because individual businessmen have not been able to swap trucks even though it may be time to replace their old vehicles as their businesses are going slowly,” said an official at KAMA.
As potential buyers tighten their wallets, experts say that conditions in the auto industry feel significantly more straitened than in 2008, when the global credit crunch flared up.
Hyundai Motor’s Porter saw a 14.4 percent drop in its one-ton truck sales to 50,561 in the first half, down from 59,074 units sold in the same period last year. Kia Motors experienced a similar trend as it sold just 29,232 trucks this year, down from 30,739.
GM Korea’s Damas, a small van that is often used to deliver packages or raw materials to factories for small business owners, saw sales slip to 4,496 from 4,685. The declines shocked the industry as sales usually go up in Korea during an economic slowdown, when more people find themselves out of work and take a gamble on starting their own business.
After the Asian financial crisis in 1998, one-ton trucks were unmatched in terms of monthly sales as more people struck out on their own.
This year, the auto industry initially predicted favorable sales as more baby boomers, or those born between 1956 and 1963, were expected to start their own businesses. According to the Small and Medium Business Administration, the number of new business registrations jumped 17.5 percent in the first half to 38,102, a new high.
KAMA said new buyers are still streaming into the market and snapping up trucks, but that the number is not yet big enough to plug the gap created by business owners who are waiting to replace their aging vehicle or fleet.
By Chang Chung-hoon, Lee sun-min [firstname.lastname@example.org]