Sales of five Korean carmakers fell by a whopping 25 percent on-year in August. According to the industry's estimate on Sunday, they sold a combined 85,600 vehicles last month, compared to 113,849 a year earlier and down 30 percent from the previous month.

The drop is largely due to the annual strike by the union of Hyundai Motor, which dragged on for weeks until the two sides finally reached an agreement at the end of August.

Although Hyundai now has a three-month backlog of orders for the new Santa Fe, the automaker was unable to meet demand due to the strike. Hyundai sold 36,000 cars last month, down 30 percent on-year, while Kia's sales slipped 13 percent to 32,000 vehicles.

Consumers are also apparently tightening their purse strings amid a sluggish domestic economy, given that the three other rival automakers saw slow sales as well.

Hyundai and affiliate Kia also saw a drop in sales of cars for which it had large inventories.

Luxury cars in particular continue to show sluggish sales. Kia's K9, which was launched in May to take on high-end sedans by the likes of BMW and Mercedes-Benz, sold around 800 units in August, dropping below 1,000 units per month for the first time since its release.