Small car sales rise to year high on economic worries

Small automobile sales rose to a year high in August boosted by rising fuel prices and concerns for a new worldwide economic downturn.

According to industry data, 38,698 small vehicles were sold on the local market in August, accounting for 53.5 percent of passenger car sales. Small automobiles are defined as those whose engines are less than 2-liter displacement under local regulations.

Last month’s figure is the year’s highest. 

While work on one of Hyundai Motor Co.’s assembly lines in August, which stopped production of the midsized sedan Sonata and the large sedan Grandeur for two weeks, is thought to have contributed to the rise in small car sales, the main factors are considered to be the rising fuel prices and worries over another economic downturn originating the U.S. 

Aided by the launch of two new models, small cars started the year with 52.9 percent market share in January. However, their share of the passenger car market remained below 50 percent, pushed down by larger models such as the latest version of the Hyundai Grandeur.

Small cars’ monthly market share then went over the halfway line in June when worries over the effects of the U.S. economic woes began to take hold. The figure increased further in the following month, when Standard and Poor’s lowered the United States’ sovereign rating. 

With sales rising in the previous three months, small cars’ share of the domestic market for the first eight months of the year has risen to 50.9 percent, a level similar to that seen in 2009 when global economic woes had boosted small car sales. 

The country’s high fuel prices are also thought to be aiding the rise in small car sales. 

According to the Korea National Oil Corp.’s data, the price of standard gasoline per liter has gone from the 1,817.31 won ($1.70) recorded in the first week of January to 1,933.88 won in the final week of August. 


By Choi He-suk
(cheesuk@heraldcorp.com)