New vehicles sales in South Korea surge in October
IHS Markit perspective
- Implications: South Korean OEMs are banking on new models to bolster sales in their home market. They have either launched or plan to bring out a raft of new models in 2018.
- Outlook : IHS Markit expects South Korea's light-vehicle market this year to be driven by new model launches, a recovering economy, the resumption of sales of Volkswagen (VW) Group's models in the country, and the reduction in individual consumption tax on passenger vehicles. We forecast that light-vehicle sales in the country will grow by 2.0% year on year (y/y) to 1.79 million units in 2018.
New vehicle sales in South Korea, including passenger vehicle imports, surged 23.8% y/y to 160,370 units during October, up from 129,562 units in October 2017, according to figures released by automakers in the country, as reported by the Yonhap News Agency, the Korean Automobile Importers' and Distributors' Association (KAIDA), and data compiled by IHS Markit. In the year to date (YTD), total vehicle sales in the country stand at 1.48 million units, up 1.1% y/y.
Hyundai and Kia maintained their lead in October with a combined market share of 70.1%. Meanwhile, imported passenger vehicle sales grew 23.6% y/y to 20,813 units in October, accounting for 13.0% of new vehicle sales in the country, according to data released by the KAIDA and reported by the Yonhap News Agency.
Outlook and implications
The surge in the South Korean new vehicle market during October can be attributed to the reduction in individual consumption tax on passenger vehicles to 3.5% from 5% until the end of 2018, strong demand for new models, and a low base of comparison.
IHS Markit expects South Korea's light-vehicle market, including passenger vehicles and LCVs, to be driven this year by new model launches, a recovering economy, the resumption of sales of VW Group models in the country, and the reduction in individual consumption tax on passenger vehicles. We forecast that light-vehicle sales in the country will grow by 2.0% y/y to 1.79 million units in 2018.
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