South Korean sales up slightly in September

Domestic sales by South Korea's five largest automakers increased by 2.1% to 112,407 units in September 2019 from weak year-earlier sales of 110,130 units, according to preliminary data released individually by the companies.

The data do not include sales by South Korea's low-volume commercial vehicle manufacturers, including Tata-Daewoo and Daewoo Bus Corporation, as well as sales of imported vehicles which are covered in a separate report when the data are released later in the month. Together these accounted for close to 15% of total vehicle sales in the country last year.

Economic growth in South Korea has slowed sharply this year, reflecting weakening domestic sentiment and falling exports as the trade war between the USA and China continues to intensify and as relations with its neighbour Japan remain strained. Bank of Korea cut its benchmark interest rate from 1.75% to 1.5% in July to help shore up consumer spending, with new models launched recently by Hyundai now struggling to lift the overall market.

Domestic sales in September were lifted by a sharp jump in Kia deliveries, of 17% to 42,005 against weak year-earlier volumes, helped by the launch of new models such as the Seltos compact MPV and the facelifted Mohave. Renault-Samsung also reported a strong sales rise last month, of 16% to 16% to 7,817 units, while Hyundai saw its sales fall by 4.5% to 50,139 units; GM Korea's sales plunged by 39% to 5,171 units; and Ssangyong's sales fell by 5.4% to 7,275 units.

Overall domestic sales in the first nine months of the year were 1.2% lower at 1,117,058 units from 1,127,441 in the same period of 2018.

Global sales among the country's "big-five" automakers, including vehicles produced overseas by Hyundai and Kia, fell by 2.3% to 662,949 units in September from 678,229 units a year earlier – reflecting weaker overseas sales. Total volumes in the first nine months of the year were 3.9% lower at 5.81 million units from 6.05 million in the same period of last year.

Overseas sales, including exports and vehicles produced overseas by Hyundai and Kia, fell by 3.1% to 550,542 units in September from 568,099 units a year earlier, reflecting continued weak demand in key developing markets including China, India and Russia and also a sharp sales decline in the USA. In the first nine months of the year volumes were 4.5% lower at 4,213,957 units from 4,413,909 units a year earlier.

Hyundai Motor's global vehicle sales fell by 1.3% to 382,375 units in September from 387,476 units a year earlier, reflecting weaker domestic and overseas sales. The brand's overall sales in the first nine months of the year were down by 3.9% at 3,231,132 units from 3,362,756 units in the same period last year.

Domestic sales declined by 4.5% to 50,139 units last month from 52,494 a year earlier, despite the recent launch of new SUVs such as the Palisade, Santa Fe and the entry-level Venue, as well as the all-new Sonata passenger car. Sales in the first nine months of the year were still 4.1% higher at 547,435 units from 525,824 units previously.

Overseas sales fell by 0.8% to 332,236 units in September from 334,982 units a year earlier and were down by 5.4% at 2,683,697 units year-to-date from 2,836,932 units previously – reflecting mainly declining sales in developing markets such as China, India and Russia.

Hyundai expects its sales in the USA to pick up momentum in the second half of the year following the launch of the Palisade in June, so the more than 9% sales decline in September after strong growth in previous months will be seen as disappointing. The company also launched its new Venue entry-level SUV in its domestic market in July and will roll out the model globally throughout the second half of the year.

Kia Motors' global sales rose by 1.3% to 233,648 units in September from 230,556 units a year earlier, reflecting stronger domestic sales. In the first nine months of the year the brand's global sales were down by 1.9% at 2,041,618 units from 2,073,379 units previously.

Domestic sales jumped by over 17% to 42,005 units in September from 35,800 units a year earlier, driven by strong demand for the facelifted Mohave and new Seltos SUVs, but were still 4.9% lower at 375,317 units year-to-date from 394,740 units previously.

Overseas sales declined by 1.6% to 191,643 units last month from 194,756 units a year earlier, with sales in the USA falling by over 13% to 44,619 units after making strong gains in recent months. Overseas sales were down by 0.8% at 1,665,337 units year-to-date from 1,678,679 units, reflecting mainly continued weakness in China offsetting higher sales in the USA and Europe. The company has stepped up its new model launches this year, with new SUVs such as the all-new Soul, the Telluride and Seltos currently being rolled out globally.

GM Korea's global sales plunged by 39% to 21,393 vehicles in September from 34,816 units a year earlier, with both domestic and export sales declining sharply. Strike action at the company's assembly plants during the month also affected deliveries. Global sales in the first nine months of the year were 9.5% lower at 308,933 units from 341,349 units in the same period of last year.

Domestic sales dropped by over 30% to 5,171 units in September from 7,434 units a year earlier and were down by more than 18% at 53,934 units year-to-date from 66,122 units previously. Exports plunged by almost 41% to 16,222 units last month from 27,382 units and by 7.3% to 254,999 units year-to-date from 275,027 units previously, despite strong demand for the locally-made Trax and the imported Equinox SUV.

The company launched the US-made Colorado pickup truck in August, with deliveries expected to start in October, followed by the imported Transverse SUV in September – helping to strengthen its line-up in a market dominated by Hyundai and Kia. The company also plans to begin local production of the Trailblazer SUV by the end of the year.

Renault-Samsung, which is 80%-owned by France's Renault, saw its global sales rise again in September, by 4.3% to 15,208 units from 14,582 units a year earlier – reflecting higher domestic volumes. Overall sales in the first nine months of the year were more than 24% lower at 129,913 autos from 171,895 units in the same period of last year.

Domestic sales jumped by 16% to 7,817 units last month from 6,713 units a year earlier, helped by strong local demand for the QM3 and QM6 SUVs, but deliveries were still more than 6% lower at 60,402 units year-to-date compared with 64,343 units previously.

Exports fell by over 6.1% to 7,391 units last month from an already weak 7,869 units a year-earlier and by more than 39% to 67,855 units in the nine-month period from 107,555 units. This mainly reflects a sharp drop in export orders from Nissan – blamed on high costs and industrial action earlier in the year. Exports are set to slow even further with the imminent discontinuation of the Nissan Rogue contract.

Renault-Samsung is scheduled to introduce a new compact SUV model at the plant next year and is in talks with its parent company about exporting the model to Europe to make up for the loss of orders from Nissan. The company also plans to begin production of the Twizy small electric vehicle (EV) in October for sale mainly in South Korea, with an annual output target of between 5,000-15,000 units.

Ssangyong Motor, majority-owned by India's Mahindra & Mahindra, reported a 1.8% drop in global sales to 10,325 units in September from 10,511 units a year earlier, reflecting weaker domestic and export demand. In the first nine months of the year the brand's sales were down by 2.4% at 99,027 units from 101,436 units previously on weaker sales of the Tivoli and G4 Rexton SUVs.

Domestic sales declined by 5.4% to 7,275 units in September from 7,689 units a year earlier, but were still up by 2.4% at 79,970 units year-to-date from 78,072 units. Exports fell by almost 2% to 3,050 units last month from 3,110 units and by over 11% to 21,433 units year-to-date from 24,174 units.

South Korean carmakers: domestic/overseas sales by brand, September 2019

Hyundai 50139 332236 382375
Kia 42005 191643 233648
GM Korea 5171 16222 21393
Renault-Samsung 7817 7391 15208
Ssangyong 7275 3050 10325
Total 112407 550542 662949

Source: from industry sources

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