The Return of Compact Cars Brought by the Recession

Hyundai Casper Sales Exceed 35,000 Units This Year
Popularity Amid Economic Downturn... Approaching 100,000 Units Sold This Year

[Asia Economy Reporter Kiho Sung] The domestic compact car market is experiencing an unexpected boom. After breaking the 100,000 sales barrier in 2019, it is once again on the verge of reaching 100,000 sales in three years. The popularity of compact cars is analyzed to be due to economic downturn factors such as rising vehicle prices, soaring fuel costs, and interest rate hikes. With electric vehicle models scheduled for release next year, the popularity of the compact car market is expected to continue for the time being.

According to the automotive industry on the 5th, Hyundai Motor's Casper sold 35,012 units up to September this year. As of the 28th of last month, marking one year since its launch, a total of 45,086 Casper units have been sold, putting it close to reaching 50,000 sales this year.

Other compact cars are also popular. Kia's Morning sold 21,626 units up to last month, approaching last year's cumulative annual sales of 24,899 units. The Ray has already surpassed last year's sales volume of 26,687 units by selling 32,796 units up to last month.

At Korea GM, compact cars are also driving sales performance. The Spark sold 1,031 units in September, ranking second in overall Korea GM sales following the Trailblazer, which sold 1,379 units.

The popularity of compact cars is also detected in the used car market. According to the direct used car platform K Car, an analysis of the average prices in October for about 740 domestic and imported models released within the last 12 years circulating in the domestic used car market showed that, amid an overall stable trend, sales of affordable models such as compact cars have increased.

As of September, the sales period for the Chevrolet Spark (the time from purchase to sale) was 23 days, shortened by 11 days compared to the previous month. It also decreased by 9 days compared to the same period last year. The Kia Morning, which has an average price about 1 million KRW higher than the Spark, also showed high demand with a sales period of 27 days, 6 days shorter than the previous month.

The compact car market had been sluggish. According to the Korea Automobile Manufacturers Association, the domestic compact passenger car market, which reached 186,702 units in 2014, recorded 95,603 units last year, decreasing by 49% over seven years. However, with the rising popularity of compact cars this year, sales from January to August totaled 87,657 units, a 44% increase compared to the same period last year.

The main reason for the increased popularity of compact cars is analyzed to be the difficult economic situation. Traditionally, compact cars had the highest demand in February and March each year, centered on young adults and first-time car buyers, but this year demand has been maintained even in the off-season months of September and October.

Park Sang-il, PM1 Team Leader at K Car, said, "Under the difficult economic conditions, demand for cost-effective models such as compact cars is increasing, but the supply in terms of purchases is low, so vehicles are sold as soon as they come in. This different trend compared to previous years may also affect the prices of target models in the future."