08 Oct 2020
Posted in Automotive
Rising domestic demand marks recovery of South Korea’s auto industry in September 2020, says GlobalData
Following the news that South Korea’s new vehicles sales in September 2020 increased by 3.4%, riding on domestic demand;
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading research and consulting company, offers his view:
“South Korea’s top five automakers Hyundai Motor Co., Kia Motors Corp., GM Korea Co., Renault Samsung Motors Corp. and SsangYong Motor Co. reported a 3.4% increase in domestic and overseas sales in September 2020. The companies sold a cumulative of 678,549 units, up from 655,968 units in September 2019. The increasing domestic and overseas sales marks the recovery of Korean auto industry from the long-prevailing COVID-19 dent.
“The new vehicle sales recovered on the back of strong domestic demand as well as improving overseas demand. Domestic sales witnessed a robust growth of 25% to 138,530 units over 110,654 units a year ago, which was primarily driven by the growing need for personal mobility amid COVID-19, increased traction towards EVs and high volume sales of models such as Tesla Model 3 and Hyundai Kona EV, aggressive promotion and launch of new models by OEMs and most importantly, the 30% decline in consumption tax, which is extended till end of this year.
“The automobile exports also witnessed its first year-on-year increase since March 2020. The demand from overseas markets including US, Europe and CIS countries witnessed decent recovery after sharp declines in previous months. There were increased shipments of South Korean SUVs and eco-friendly vehicles. The overseas sales now stand at a 540,019 units, which is a minimal decline of 1% compared to the September 2019. Imports also remained positive, witnessing growth of 20.8% over previous year.
“With the Korean automakers set to launch new vehicles and aggressive promotion campaign in the next few months, the Q4 2020 domestic sales in South Korea may witness significant increase and counterbalance the slump created by the COVID-19. For instance, Hyundai has announced launch of its new Tucson SUV and G70 sedan, SsangYong has plans to launch Tivoli Air SUV and Renault Samsung is all set with its Zoe all-electric. Tax relation of automobiles and availability of incentives on EV will remain major driving forces.”