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Korean carmakers see exports worsen amid eurozone woes

Publication Date : 17-10-2012


Following the prolonged slump in car sales at home, five major automakers here saw their exports continue to decline over the past few months on a year-on-year basis.

According to the Korea Automobile Manufacturers Association, exports of these five companies ― Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and Ssangyong Motor ― collectively stood at 232,025 units in September, down 7.2 per cent from a year earlier.

Their exports recorded an on-year decline for the fourth consecutive month, following the fall of 1.4 per cent in June, 10.4 per cent in July and 23.6 per cent in August.

Renault Samsung reported the sharpest drop with 40.3 per cent last month, followed by Kia Motors with 9 per cent, Ssangyong Motor with 7.7 per cent, Hyundai Motor with 4.5 per cent and GM Korea with 1.5 per cent.

KAMA attributed their slump in exports to expanding uncertainties from the ongoing eurozone fiscal crisis.

“Though the carmakers enjoyed an increase in exports during the first quarter on the back of the Korea-EU Free Trade Agreement (which took effect in July 2011) in the first half of the year, they were somewhat hit by the global economic downturn in the latter half,” the association said in a statement.

Hyundai Motor and Kia Motors are still posting robust sales in terms of overall figures as the affiliated firms saw their sales of cars produced in their overseas factories offset the sagging exports and domestic sales.

“Exports of cars produced in Korean plants fell on a year-on-year basis in the wake of a labour union protest as well as the eurozone woes,” a Hyundai Motor Group spokesman said.

In contrast, the eurozone crisis dealt a more severe blow to the three other firms which operate no overseas plants, according to automotive research analysts.

Meanwhile, the Korea Automobile Research Institute predicted that global companies would see the pace of sales growth “slow down markedly”.

Affected by the weaker consumer sentiment globally, the local market will see “the number of vehicle sales stay about 1.55 million units this year, down by 30,000 units from 1.58 million units a year earlier,” said KARI, a unit of Hyundai Motor Group.

Local and import brands’ vehicle sales in Korea are projected to fall by 2.1 per cent in 2012 compared to the previous year, an automotive research centre said.

Despite the estimated yearly drop of 2.1 per cent, import brands such as BMW Group Korea and Mercedes-Benz Korea are expected to post more than 20 per cent in sales growth, it added.

The institute cited a slashed tariff on imported vehicles under the Korea-EU FTA and active introduction of cheaper car models for the boost in foreign players’ sales.

For its forecast on the world’s market, KARI said that global companies’ sales growth will likely slow to below 5 per cent in the latter half, compared to about a 7 per cent growth in the first half.

It picked the worsening eurozone crisis and lagging pace of economic recovery in the US as the main unfavourable factors.

In particular, according to KARI’s analysis, major emerging markets like Brazil and Russia will take the lead in weak demand globally.


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