Overall auto sales in South Korea this year is projected to decline for the first time in three years, a report said Thursday.
According to a research center under Hyundai Motor, the country‘s largest carmaker, the local car market grew 9 percent in the first half year-on-year thanks to a consumption tax cut and a series of market debuts of vehicles by local carmakers.
However, the market would see a significant decline in the latter half of the year with customers feeling less likely to buy cars without the tax benefits that ended in June as well as the impact of the nation‘s sluggish economy, it added.
The government’s new policy to financially support owners who would scrap old diesel cars would only add around 30,000 cars to the market, the report predicted.
Overall, the market would fall 8.7 percent in the second half, with combined sales of this year coming at 1.8 million units, a 0.5 percent fall from the previous year.
Apart from the weak performance in the local market, the Korean auto makers are also expected to face challenges in the global market due to the continued economic recession.
The global auto market grew 2.5 percent in the first half on-year, posting 43.7 million sales. Sales in the European and Chinese markets grew by 9.1 percent each but those in Brazil and Russia fell by 25 percent and 14 percent each. The U.S. market also posted a low growth of 1.5 percent.
The market would continue to see low growth at around the two percent level in the second half due to growing uncertainty after Brexit and the continued economic slowdown in emerging countries, the report said.
The European market, which grew nine percent in the first half, is predicted to rise only by 0.7 percent in the later half because of falling consumer sentiment after Brexit. The U.S. market would also rise 1.3 percent this year, the lowest figure in seven years since the global financial crisis.
The total global vehicle demand this year would come at 88 million units, a 2.4 percent growth year-on-year, the report added.
By Shin Ji-hye (
shinjh@heraldcorp.com)
