The domestic automotive industry, including Hyundai Motor Company, Kia, KG Mobility (KGM), and GM Korea, is busy seeking breakthroughs as it shows poor performance in both exports and domestic markets. The automotive industry plans to increase sales by expanding new vehicle offerings and enhancing discounts.
Recently, KGM announced plans to strengthen its lineup of environmentally friendly vehicles, including hybrids and electric cars, to secure medium- to long-term competitiveness. It plans to introduce seven new environmentally friendly models by 2030 and expand the development of next-generation hybrid systems and extended-range electric vehicle (EREV) technology.
GM Korea is contemplating strategies to turn around the atmosphere, including promotions and expanding exports. For its major brands, Chevrolet and Cadillac, new vehicles are currently offered with a 60-month installment plan and discounts of 10 million won.
Hyundai Motor Company and Kia also took steps to offer discounts on certain models to deplete inventory and increase new vehicle sales. The Ioniq 6 provides discounts of up to 9 million won based on the high-end trim, while internal combustion models such as the Grandeur, Santa Fe, and Tucson offer discounts of 3 million to 4 million won. As part of efforts to expand the distribution of electric vehicles, discounts on new vehicles are being offered to employees and partner companies.
Kia offers discounts of up to 3 million won on the purchase of the K5 and K8, while the Niro hybrid and electric models provide discounts of 3 million to 4 million won. KGM offers a discount of up to 2 million won on the Actyon and provides free installation of 4WD for the Rexton produced before January.
The domestic automotive industry's sales volume in May was 113,139 units, down 2.9% from the same period last year (128,639 units). From January to May, while sales of imported cars increased by more than 14%, domestic car sales increased by only 1%.
Sales of all companies, with the exception of Renault Korea, which performed well with its mid-size sport utility vehicle (SUV) the Grand Koleos, were sluggish. Hyundai Motor Company saw a domestic sales drop to 58,966 units last month, down 5.2% year-on-year, while Kia's sales of 45,003 units decreased by 2.4%. KGM recorded 3,560 units, down 11%, and GM Korea saw 1,408 units, down 39.8%.
Last month's exports of completed cars recorded a decrease of 4.4% year-on-year at $6.2 billion (approximately 8.48 trillion won), with a 3.1% decrease in units at 247,577. Notably, exports to the U.S., which incur a 25% tariff, amounted to $3.45 billion (approximately 4.7 trillion won), a sharp decline of 27.1% compared to the same period last year. Exports to the U.S. have decreased for three consecutive months, following declines of 10.7% in March and 12.9% in April. Analysis suggests that the imposition of tariffs on imported vehicles in the U.S. starting in April has progressively increased the extent of the decline.