South Korean sales drop in May

Domestic sales by South Korea’s five main automakers combined fell by 3.5% to 119,807 units in May 2022 from 124,145 units a year earlier, according to preliminary wholesale data released individually by the companies.

The data did not include sales by South Korea’s low-volume commercial vehicle manufacturers such as Tata-Daewoo and Edison Motors, as well as sales of imported vehicles which will be covered in a separate report later in the month.

The ongoing shortage of semiconductors continued to affect vehicles supplies to the local market with all brands reporting domestic sales declines in May. Hyundai’s local deliveries dropped by 2% to 63,373 units while Kia’s sales were down by almost 5% at 45,663 units, GM Korea 2,768 units (-40%), Ssangyong 4,275 (-14%) and Renault Korea 3,728 units (-20%).

Domestic sales in the first five months of 2022 were down by over 11% at 547,733 units from 618,433 in the same period of last year.

Global sales by the country’s big five automakers, including vehicles produced overseas by Hyundai and Kia, fell by 6.6% to 591,166 units in May from 637,621 units a year earlier due to falling domestic and overseas sales, while cumulative five month volume was down 5.5% at 2,896,520 from 3,065,928 units. Overseas sales fell by 2.6% to 471,359 units last month from 483,751 a year earlier and by 4% to 2,348,787 units year to date from 2,447,495 units, reflecting also tight supplies of semiconductors.

Hyundai Motor global sales fell just slightly in May, to 324,039 units from 325,542 a year earlier, with improving domestic deliveries more than offset by a small decline in overseas sales. The company said it had made significant efforts to minimise the impact of the continued shortage of components and rising raw material costs. Its global sales in the first five months of the year were still more than 8% lower at 1,536,865 from 1,674,554 units.

Domestic sales increased by over 2% to 63,373 units last month from 62,056 a year earlier, helped by strong demand for its SUVs and for its upmarket Genesis brand. Five month volume was still down by over 13% at 274,886 from 317,688 units. Overseas sales fell by just 1% to 260,666 in May from 263,486 units, despite significant headwinds including the suspension of Russian operations and logistics issues in China, while cumulative sales were down by 7% at 1,261,979 from 1,356,866 units.

Hyundai maintained its forecast for an 11% rise in full year global sales to 4,323,000 vehicles in 2022, driven by a 13% rise in overseas sales to 3,591,000 units and a slight rise in domestic sales to 732,00 units. The automaker said it would “endeavour to alleviate business uncertainties by optimising production and inventories and by tailoring its business strategies to each region”.

Kia global sales fell by almost 5% to 234,554 vehicles in May from 246,768 a year earlier, reflecting a slowdown in both domestic and overseas sales. In the first five months of the year, total sales were down 2.5% at 1,159,832 units from 1,190,045 a year earlier, with deliveries affected by tight semiconductor supplies.

Domestic sales fell by almost 5% to 45,663 units last month from 47,901 a year earlier and were down by over 5% at 217,422 units year to date from 229,104 units, with volume underpinned by strong demand for SUV models such as the Sorento and Sportage. Overseas sales also fell by almost 5% to 188,891 units in May from 198,867, led by Sportage and Seltos SUVs, while cumulative sales were almost 2% lower at 942,410 compared with 960,941 units.

Kia maintained its forecast for full year global sales to grow by 14% to 3.15 million units in 2022, including 562,000 domestic sales and 2.59 million units overseas, helped by new models such as the EV6 GT and Niro.

GM Korea global sales fell by over 4% to 15,700 vehicles in May from 16,428 a year earlier, with domestic deliveries continuing to plunge due to weak demand and the global shortage of semiconductors. Cumulative five month sales were down by almost 25% at 96,068 units from 127,907 units previously.

Domestic sales dropped by 40% to 2,768 units in May from 4,597 units a year earlier and by 52% to 13,118 year-to-date from 27,420 units. The automaker plans to launch the upgraded Equinox SUV this month and the GMC Sierra pickup truck later this year to help support domestic volume, following the launch of the Tahoe full size SUV in May.

Exports rose by over 9% to 12,932 units last month from 11,831 units, driven by strong deliveries of the Trailblazer SUV, while cumulative volume was down 17% at 82,950 from 100,487 units.

GM Korea last month reduced operations to one shift at its Bupyeong 1 plant near Seoul due to low volume. The company also said it would cease operations at its Bupyeong 2 plant at the end of the year, with production of the Trax compact SUV and Malibu midsize sedan to be discontinued in November. Its Bupyeong 1 and Changwon plants have a combined production capacity of 500,000 vehicles annually on three shifts and currently make the Chevy Trailblazer SUV and the Spark mini car respectively. A new crossover utility vehicle will go into production at the Changwon plant later this year.

Last December the company said it planned to launch 10 new electric vehicle models in South Korea by 2025, all of which it plans to import from North America.

Renault Korea saw its global sales fall by 17% to 8,591 vehicles in May from 10,348 units, as both domestic and export sales both fell sharply. Overall sales in the first five months of the year were still up by almost 54% at 64,145 from 41,760 units previously on strong export growth in previous months.

Local sales fell by almost 20% to 3,728 units last month from 4,635 a year earlier and by a similar rate to 18,715 year-to-date from 23,320 units. Exports fell by 15% to 4,863 units in May from 5,713 units after strong growth in previous months as the company stepped up shipments of the XM3 and QM6 SUVs to Europe, with cumulative volume up 145% at 45,430 from 18,530 units.

Ssangyong Motor global sales were 8,282 vehicles in May from a weak 8,750 units a year earlier, reflecting a sharp fall in domestic sales as chip supplies remained tight. Cumulative five-month sales were still up by over 25% at 39,610 units from 31,660 units.

Domestic sales fell by 14% to 4,275 units last month from 4,956 a year earlier, while year to date sales were up by 32% at 23,592 from 20,901 units. Exports rose by 4% to 4,007 units in May from 3,854 units a year earlier and cumulative volume was up by 49% at 16,018 from 10,759 units. The company launched its first battery powered SUV in March, the Korando e-Motion, to help strengthen its domestic sales.

EY Hanyoung, the main court appointed administrator, plans to hold a new auction for the bankrupt automaker on 24 June following the collapse of the Edison Motor takeover at the end of March. The deadline for the completion of a new deal has been set for mid-October.

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