Compact Market Loses Steam as Buyers Seek Novelty and Space

      June 12, 2014 10:44

      Korean consumers are rapidly losing interest in compacts. While sales of mid- and large-sized cars and subcompacts are on the rise, the group in between is suffering.

      The country's five carmakers -- Hyundai Motor, Kia Motors, GM Korea, Ssangyong Motor and Renault Samsung Motors -- sold a total of 158,574 mid- and large-sized sedans from January to May this year, up 6 percent from the same period in 2013.

      This is largely due to the launch of new models in the category, including the Sonata and Genesis, the flagships of Korea's top automaker Hyundai.

      The new Genesis, which hit the local market late last year, saw sales reach about 25,000 units in the first five months of this year. Sales of the Sonata increased 13 percent over the same period on-year due to the arrival of an upgraded version in March.

      Some 79,473 subcompacts were sold during the same period, up 6.4 percent from last year. Kia's Ray is leading this market segment as demand for the model has jumped nearly 30 percent on-year.

      "Although the company didn't release any new models, the Ray appeals to consumers with its efficient use of space and low price as leisure activities are getting more popular these days," a Kia staffer said.

      On the other hand, compact sales maxed out at 15,752 units, down 18 percent from a year ago. Their combined sales continued to drop for the third consecutive year, with the Accent, Pride and Chevrolet Aveo among the most popular models.

      Larger compacts like the Avante, K3 and Chevrolet Cruz took less of a hit but total sales had still shrunk 4.9 percent on-year to 80,350 units.

      Experts attributed the trend to the fact that few compacts have introduced upgraded versions and that an increasing number of their target buyers -- people in their 20s and 30s -- tend to hunt for more spacious mid-sized cars.

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