SUVs are posting rapid growth and accounting for the lion's share of carmakers' earnings, despite the depressed state of the overall domestic car market.
Korea's five automakers -- Hyundai Motor, Kia Motors, GM Korea, Ssangyong and Renault Samsung -- sold a combined 236,127 SUVs in the first ten months of this year.
They sold 40,000 fewer compacts, which are traditionally the most popular of all the car classes.
At this pace, SUVs will emerge as the most popular category of passenger car in Korea for the first time since 2005. In 2012, SUVs ranked second to compacts -- which sold 262,068 units -- as their sales lagged by some 5,100 units.
SUVs are also outperforming compacts in terms of exports this year. They grew by more than 7 percent on-year to 700,000 units in the first three quarters, while compacts were down 17 percent to 880,000.
Rising demand at home and abroad has led to a 9 percent increase in the production of SUVs this year. Some 916,301 were rolled out in the first nine months, making up 31 percent of all cars produced in the country (2.97 million units).
The SUV has been gaining popularity since the 2008 global financial crisis as consumers have opted for more practical and durable models.
The release of new models this year like Hyundai's New Tucson ix, Kia's New Sportage R and GM Korea's Trax has also contributed to the growing sales.
However, not all automakers are enjoying booming sales in this market segment. Renault Samsung sold just 4,000 QM5 SUVs in the first 10 months of the year, aggravating the already sluggish sales of flagship SM3 and SM5 sedans. As a result, Ssangyong replaced it as the No. 4 automaker here.
Ssangyong saw its overall domestic sales jump 35 percent on-year over the same period to 50,000 units, with SUVs accounting for 70 percent. Sales of its flagship SUVs, including the New Korando C launched in August, the Korando C Sports and the Rexton, rose by more than 16 percent.
To turn the tide, Renault Samsung plans to introduce a diesel version of its QM3 in Korea at the end of this year. This will be a modified version of its Captur, a model it only sells in foreign markets.