Due to the economic downturn, while in the past small car sales have increased, it is now anticipated that this will not be the case.
The Korean Automobile Journalists Association held a forum on the theme of ‘2023 Global Automotive Market Outlook’ at Seolgawon in Gwanghwamun, Seoul, on the 18th.
The South Korean economy is experiencing extreme recession. With monetary tightening policies in the U.S. and China, interest rates are rising in various countries, and the domestic financial market is stagnant, preventing proper circulation of funds. The Bank of Korea’s base rate stands at 3.50%, and the installment rates from major capital companies overseeing auto loans have exceeded 10%, leading to a significant number of potential buyers abandoning purchases. Some automotive brands’ sales showrooms have even seen sales staff give up on selling.
Lee Dong-hyun, head of the Automotive Industry Research Office at Hyundai Motor Group’s Economic and Industry Research Center, stated, ‘There are no affordable vehicles in the domestic automotive market.’ He emphasized, ‘While there are many sales of the Avante, there are currently no models that can be purchased below it in the sedan market,’ explaining the increase in market prices.
According to him, ‘Sales of compact cars may see some increase, but there will be sales variances by model even within certain vehicle classes.’ He also noted that due to high-interest rates, cancellations from customers approaching their delivery dates continue, yet cited that some popular models still have a waiting period of up to one to two years, asserting, ‘There will not be an increase in small car sales due to the economic downturn as in the past.’
Lee Sang-jin daedusj@autodiary.kr