Auto sales projected to shrink 3.5 percent in 2021

[NEWS1]

Auto sales in Korea are projected to shrink by 3.5 percent in 2021.

The Korea Automobile Manufacturers Association (KAMA) said in a report Monday that auto sales in Korea this year are expected to reach 1.84 million units, 3.5 percent fewer than last year’s 1.9 million. Domestic car sales hit an all-time high in Korea last year.

The projection in the report was based on industry trends and opinions from auto industry experts, the association said.

“Last year, Korea’s auto sales were able to record an all-time high thanks to tax incentives on purchases and other policies to boost the domestic industry,” the report said. “This year, the figure is expected to shrink due to the base effect and also due to a supply shortage of auto chips.”

Sales of domestic cars in Korea are expected to decrease by 5.8 percent this year to 1.51 million units.

"Fewer new models from domestic carmakers launching this year are expected to hamper sales of domestic cars," the association said.

Domestic carmakers — Hyundai Motor, Kia, GM Korea, Renault Samsung Motors and SsangYong Motor — released 12 new models last year, but are only expected to release eight this year.

SsangYong and Renault have released no new models so far this year and don't plan to do so.

Sales of imported cars in Korea, on the other hand, are expected to be strong.

A total of 330,000 imported cars are expected to be sold in Korea this year, a 9.1 percent jump from last year.

"Aggressive price cut and diversified sales channels of imported cars will boost sales," the report said.

Auto production in Korea is expected to jump by 4.4 percent year-on-year in 2021 to reach 3.66 million units on the back of strong exports. Korea's auto exports are expected to reach 2.15 million units this year, a 14 percent year-on-year jump.

"Last year, auto demand in major export markets shrunk due to Covid-19," the report said." This year, auto exports from Korea are expected to increase on a base effect as well as economic recovery in the United States and other major European countries."

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]