New car sales dips to 11-year low in South Korea

by IANS |

Seoul, Oct 30 (IANS) New automobile sales during the first nine months of the year fell over 8 per cent from a year earlier amid high borrowing costs and a slowdown in global electric vehicle demand, industry data showed on Wednesday.

According to the data from the Korea Automobile and Mobility Association (KAMA), registrations of new cars during the January-September period totalled 1,209,154 units, down 8.7 per cent from a year ago.

It marked the lowest recording for the nine-month period since the 1,175,010 units tallied in 2013. The number of gasoline vehicles decreased 19.6 per cent on-year to 515,000 units, while diesel registrations plummeted 56.7 per cent to 99,000 units. EV registrations also fell 7.9 per cent to 108,000, reports Yonhap news agency.

Hybrids was the only category that saw a bump in registrations, adding 27.6 percent to 355,000 units. Industry watchers have attributed high-interest rates as having led to consumers holding back on car purchases, as well as an overall stagnation of EV demand.

The country's annual tally is also estimated to reach its lowest level in 11 years, barely exceeding 1.6 million units. KAMA previously predicted annual sales to reach 1.7 million units.

Meanwhile, a recent industry analysis showed that South Korea's auto industry will likely face drops in domestic sales and production this year due to the prolonged economic downturn and sluggish demand.

According to the analysis by the Korea Automobile Manufacturers Association (KAMA), domestic car sales and the country's total vehicle production for 2024 are expected to reach 1.7 million units and 4.22 million units, respectively.

The figures represent 2.8 per cent and 0.6 per cent decreases, respectively, from last year.

KAMA said domestic sales were expected to fall due to reduced demand for new cars amid high interest rates and decreased disposable income. A reduction in electric vehicle subsidies is also expected to impact demand. The expected contraction in demand is forecast to weigh down total car production, the association predicted.