City car sales dip after tax cut: data

Sales of city cars dropped for the past two months after the government lowered taxes on autos in August, prompting consumers to buy mid- and large-sized vehicles over smaller ones, industry data showed Wednesday.

According to the data, the country's overall auto sales jumped to some 164,000 units in October from 149,000 in September and 139,000 in August.

But sales of city cars with an engine capacity of less than 1,000 cc remained dull or fell slightly with 13,600 units sold in October, 15,000 in September and 15,000 in August.

The government lowered the consumption tax on autos and large home appliance goods on Aug. 26 in a bid to curb a slowdown in domestic demand hit by the outbreak of the Middle East Respiratory Syndrome in late May.

Sales of mid-sized sedans, such as Hyundai Motor Co.'s Avante and GM Korea Co.'s Cruise, stood at some 16,600 for both September and October, compared with a monthly average of 13,200 units in the first eight months of the year.

Industry watchers said consumers started purchasing mid-sized sedans over city cars as the small autos no longer receive tax reductions while larger cars do. (Yonhap)