'Corona Shock' Five Domestic Automakers' March Exports Plunge 21% (Comprehensive)

[Asia Economy Reporter Suyeon Woo] Due to the impact of the novel coronavirus infection (COVID-19), demand in overseas markets has dried up, causing South Korea's domestic automobile industry's overseas exports to plummet by 21% compared to the previous year. While supply disruptions of parts due to COVID-19 caused shocks in the domestic market in February, the global spread of the infectious disease in March adversely affected exports.

According to the automobile industry on the 1st, five domestic finished car manufacturers (Hyundai, Kia, Renault Samsung, Korea GM, Ssangyong Motor) exported 446,801 vehicles to overseas markets in March alone. This figure represents a decrease of about 20.9% compared to the previous year.

By company, Renault Samsung recorded the largest drop, with exports halving to just 3,088 units due to a decrease in consignment volume of the Nissan Rogue. Next, Hyundai's exports fell by 26%, Korea GM by 20%, Kia by 11%, and Ssangyong's exports decreased by about 4% compared to the previous year.

On the other hand, the domestic market showed a clear recovery, proving the effect of new car launches from the beginning of the year. The five companies sold 151,025 units domestically, an increase of 9.2% compared to the previous year. Renault Samsung, which succeeded in gaining popularity with the XM3 launched last month, recorded 12,012 units, up 83%, and Korea GM's domestic sales, led by the Trailblazer and Traverse, increased by about 40% compared to the previous year.

◆ Overseas Market Frozen by COVID-19... Hyundai's Exports Down 26%

Hyundai's export performance in March was directly hit by demand contraction due to COVID-19 and the suspension of operations at some overseas plants. Hyundai sold 308,503 units globally in March (72,180 units domestically, 236,323 units overseas). Compared to the same period last year, domestic sales increased by 3%, while overseas sales plummeted by 26.2%.

In contrast, in the domestic market, the sedan lineup led sales, with the Grandeur (including 3,032 hybrid models) selling 16,600 units. Following were the Sonata (including 720 hybrid models) with 7,253 units and the Avante with 3,886 units, totaling 28,860 sedans sold.

Notably, the Grandeur achieved its highest sales in 3 years and 3 months since December 2016 (17,247 units), and the Sonata's sales rose 20.2% compared to the same period last year, showing that new cars performed well despite the overall contraction in consumer sentiment. The new Avante, scheduled for release on the 7th of this month, has already surpassed 10,000 pre-orders within a day, raising expectations.

A Hyundai official said, "Despite production disruptions and demand contraction caused by COVID-19, sales increased thanks to the new car effect," adding, "We will focus all company capabilities on overcoming the crisis and strive to normalize sales."

◆ Kia's Exports Also Down 11% Amid COVID-19 Issues

Production and sales disruptions caused by COVID-19 also affected Kia. In March, Kia sold 226,960 units globally, including 51,008 units domestically and 175,952 units overseas, a 6.4% decrease compared to the same period last year. This represents a 15.3% increase domestically and an 11.2% decrease overseas compared to last year.

In overseas markets, the Sportage was the best-selling model with 27,362 units sold, followed by the Seltos with 21,771 units and the Rio (Pride) with 20,849 units.

Meanwhile, in the domestic market, new models such as the new K5 and Sorento received a good response, leading to a sales rebound. Additionally, the government's individual consumption tax reduction, implemented from March, also had some effect. Last month, Kia's best-selling car, the K5 (8,193 units), ranked first in Kia's monthly sales for four consecutive months since the launch of the third-generation K5 in December last year.

◆ Renault Samsung's Exports Down 57%, Domestic Sales Up 84% in March

Renault Samsung Motors' exports in March dropped sharply by 57.4% to 3,088 units compared to the previous year. The reduction in export volume of the Nissan Rogue, a major export model, worsened Renault Samsung's overall export performance. In March, Renault Samsung's Rogue exports were 1,433 units, down 75.2% year-on-year.

On the other hand, domestic sales improved significantly with the launch of the new XM3 after a long time. Renault Samsung's domestic sales increased by 83.7% year-on-year to 12,012 units. The XM3 has sold a total of 5,581 units since its launch on the 9th of last month, driving performance.

The XM3 recorded a cumulative contract of 17,263 units by the end of March, with 74% of customers choosing the top trim TCe 260 RE Signature. Also, 45.7% of all contract holders are in their 20s and 30s, showing strong response from younger consumers.

◆ Korea GM's Domestic Sales Lifted by New Cars... Exports Still 'Dark'

Korea GM's domestic market recovered with new car sales such as the Trailblazer and Traverse, but exports are still on a downward trend.

Korea GM sold 8,965 units domestically in March, up 39.6% year-on-year, but exports were 28,953 units, down 20.8% compared to the previous year. Exports of mid-to-large passenger cars increased by more than 200% year-on-year, while exports of compact passenger cars and RVs declined.

Domestic sales were led by the Chevrolet Trailblazer, which began full customer deliveries in February, selling 3,187 units in March. The large sport utility vehicle (SUV) Traverse sold 532 units, a 121.7% increase from the previous month, marking the highest monthly sales ever.

◆ Ssangyong Motor in the 'Swamp of Slump,' Both Exports and Domestic Sales Decline

Ssangyong Motor has not escaped the slump, with both exports and domestic sales declining in March. In the domestic market, sales plummeted 37.5% compared to the same period last year, with 6,860 units sold. By model, the Rexton Sports sold the most with 2,582 units, followed by the Tivoli with 1,914 units and the Korando with 1,562 units.

Exports fell 4.6% year-on-year to 2,485 units. Ssangyong expects to offset the export decline as Korando's local sales in Europe begin in earnest. Ssangyong has actively promoted Korando's entry into Europe through the Brussels Motor Show and Vienna Auto Show earlier this year, and held a launch event in Peru in February.