[02 Feb] S Korea January Car Sales Jump 64% on Strong Sales, Base Effect

Strong sales of new cars and comparison with a base that was hammered by the economic crisis allowed South Korea's five car makers to report a robust 64% rise in vehicle sales in January.

The companies will continue to benefit from additional new car launches slated for this year, analysts said.

Domestic sales by five car makers--Hyundai Motor Co., Kia Motors Corp., GM Daewoo Auto & Technology Co., Ssangyong Motor Co. and Renault Samsung Motors Corp.-- jumped 62% from a year earlier to 118,862 units in January from 73,537 units, according to data from the companies released Monday.

"In a base effect, monthly sales in January sharply increased as domestic automobile demand fell to a record low in January (2009) since the 1998 financial turmoil," Yun Tae-sik at Daewoo Securities said.

Total sales, including exports, climbed 64% to 512,637 units last month from 312,528 units a year earlier, largely helped by robust sales of new cars such as Hyundai's YF Sonata sedan, Kia's K7 sedan and Renault Samsung's New SM5 sedan, data showed.

"Though (domestic) tax incentives for new car purchases ended in December, orders carried over to January (from December) helped boost the monthly sales," Yun said. "New cars will be another catalyst (to boost sales)."

Hyundai Motor said it will launch new models based on the Verna subcompact car, the Avante compact and the Grandeur large sedan this year, while Kia Motors said it will introduce models based on the Sportage sport-utility vehicle and the Lotze midsize sedan.

Hyundai sold a total 269,841 units in January, up 50% from 179,385 units a year earlier, while Kia's sales more than doubled to 163,238 units from 74,265 units.

January sales in GM Daewoo, the South Korean unit of General Motors Co., rose 23% from a year earlier to 56,281 units and sales in Renault Samsung, 80% owned by Renault S.A., climbed 66% to 18,676 units.

Ssangyong Motor saw its sales sharply recover to 4,601 units in January from 1,644 units a year earlier, as the court's acceptance of the company's turnaround plan in December boosted confidence in the car maker.

It filed for bankruptcy protection in February 2010 following a severe cash shortage stemming from a sharp fall in sales of fuel-guzzling SUVs amid an economic slump.

(Source: irco.biz)