Tax break underpins Korean market recovery | Automotive Industry News

Following the news that domestic sales by South Korea’s five main automakers combined increased by just over 25% to 138,530 units in September 2020, a GlobalData analyst told just-auto that the Korean auto industry is firmly in recovery – helped by a tax break that is boosting the Korean market. 

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, notes that South Korea’s top five automakers – Hyundai Motor Co., Kia Motors Corp., GM Korea Co., Renault Samsung Motors Corp. and SsangYong Motor Co. – sold a cumulative of 678,549 units in September, up from 655,968 units in September 2019.

“The increasing domestic and overseas sales marks the recovery of Korean auto industry from the long-prevailing COVID-19 dent,” he says.

“The new vehicle sales recovered on the back of strong domestic demand as well as improving overseas demand. Domestic sales witnessed a robust growth of 25% to 138,530 units over 110,654 units a year ago, which was primarily driven by the growing need for personal mobility amid COVID-19, increased traction towards EVs and high volume sales of models such as Tesla Model 3 and Hyundai Kona EV, aggressive promotion and launch of new models by OEMs.

“Most importantly, the 30% decline in consumption tax, which is extended till end of this year, is also boosting sales.”

Automobile exports also saw a first year-on-year increase since March 2020 with demand from overseas markets including US, Europe and CIS countries up after sharp declines in previous months. “There were increased shipments of South Korean SUVs and eco-friendly vehicles,” says Agwan.

Agwan also forecasts strong sales ahead. “With the Korean automakers set to launch new vehicles and aggressive promotion campaign in the next few months, the Q4 2020 domestic sales in South Korea may witness significant increase and counterbalance the slump created by the COVID-19,” he maintains. “For instance, Hyundai has announced launch of its new Tucson SUV and G70 sedan, SsangYong has plans to launch Tivoli Air SUV and Renault Samsung is all set with its Zoe all-electric. Tax relation of automobiles and availability of incentives on EV will remain major driving forces.”

See also: South Korean sales jump 25% in September



Source link