Author: Tronserve admin
Wednesday 4th August 2021 11:38 AM
Korean Automakers’ 2019 Output Falls Below 4-Mn for the First Time in Decade
South Korean automakers saw their combined annual production in 2019 fall below 4 million units for the first time in a decade, underscoring waning competitiveness of Korea’s pillar manufacturing industry due to persistent labor unrest and ascension of Chinese rivals.
According to data released by the Ministry of Trade, Industry and Energy on Thursday, Korean finished carmakers – Hyundai Motor, Kia Motors, GM Korea, Renault Samsung and SsangYong Motor – shipped 3,951,000 units in 2019, down 1.9 percent from a year ago. The last time annual output fell below the 4-million threshold was in 2009 amidst global financial crisis. In December alone, the output fell 5.4 percent on year to 337,504 units.
Korean carmakers’ underperformance owed largely to the troubles of carmakers under foreign ownership - GM Korea and Renault Samsung Motors. The two accounted for 92.6 percent of the entire output decline of the local auto sector. GM Korea rolled out 70,000 units of cars last year, down 34.5 percent from 107,000 units a year earlier. Renault Samsung’s annual output also declined 7.9 percent on year to 410,000 units. The two have been suffering from waned orders from their parents who were unhappy with never-ending labor conflict and wage demands even as the Korean operation is paid among the highest in their global umbrella.
The country’s five finished carmakers globally shipped out a combined 7,920,812 units of cars in 2019, falling below the 8 million mark. The figure is 12.1 percent lower from the peak at 9,011,240 units in 2015.
Poor performance in the overseas markets was blamed for the overall sluggish sales, industry watchers suggested. Market share of the Korean automakers in the world’s biggest auto market China plunged to 4.5 percent based on the cumulative sales in the January-November period in 2019 from 7.9 percent in 2015. They accounted for 7.8 percent in the U.S., down 0.2 percentage point from 2018.
While the carmakers are struggling both at home and abroad, foreign brands are eating away at the Korean auto market. The Ministry of Land, Infrastructure and Transport said imported vehicles accounted for 10.2 percent in the market, surpassing 10 percent for the first time following steady increase from 2.5 percent in 2009, 5.5 percent in 2014, 8.4 percent in 2017 and 9.4 percent in 2018.
The silver lining is that the carmakers’ export volume reached a four-year-high in 2019 thanks to the brisk sales of premium eco-friendly cars and sport utility vehicles (SUVs). Outbound shipments of SUVs grew 6.3 percent to hit a record high of 1,476,000 units last year, and green car exports also jumped 31.7 percent to reach an all-time high of 259,000 units.