Car market set to shrink 1%

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Car market set to shrink 1%

Korea’s auto market will likely shrink 1 percent on-year in 2013 due mainly to a slowdown in the country’s economy, a report said yesterday.

According to the report by the Korea Automotive Research Institute (KARI), car sales here will reach an estimated 1.53 million vehicles next year, compared with an estimate of 1.55 million units for the whole of 2012. The 2012 sales estimate represents a 2.1 percent decline from the previous year.

“Domestic car sales will remain sluggish next year due to a slowing economy, no possible plans for new car releases, and the end of tax reduction benefits,” KARI said in the report.

The Korean government cut special consumption taxes on vehicles temporarily last month in a bid to boost domestic demand, but the tax-cut plan is scheduled to expire at the end of the year. KARI said car exports are expected to gain 1.2 percent on-year to 3.31 million units next year, with 4.71 million vehicles produced, up 0.4 percent on-year.

Sales of imported cars in Korea will rise 3.9 percent on-year to 134,000 vehicles in 2013, a slowdown from an estimated 20 percent jump in 2012, said KARI.

The KARI report said the global auto market is also predicted to experience a slowdown in sales next year due to lingering economic uncertainties.

Total car sales throughout the world will advance 3.4 percent on-year to 80.8 million units in 2013, compared to 11.9 percent expansion in 2012.

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