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Comprehensive Analysis of Car Sales and Popular Brands in South Korea in 2023

GOOVER DAILY REPORT 6/12/2024
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TABLE OF CONTENTS

  1. Introduction
  2. Overview of Car Sales in South Korea
  3. Electric Vehicle Market Dynamics
  4. Analysis of Popular Car Models
  5. Consumer Preferences and Market Trends
  6. Challenges and Recalls in the Automotive Market
  7. Glossary
  8. Conclusion
  9. Source Documents

1. Introduction

  • This report provides an in-depth analysis of car sales in South Korea for the year 2023, focusing on the market performance of domestic and imported brands, particularly the trends in electric vehicle (EV) sales.

2. Overview of Car Sales in South Korea

  • 2-1. Hyundai's Sales Performance

  • In 2023, Hyundai Motor Company reported a robust increase in its car sales. Hyundai's global vehicle sales in February 2023 amounted to 327,718 units, a 7.3% rise compared to the previous year. Over the first two months of the year, the company sold 637,841 vehicles, marking an 8.5% year-over-year increase. Specifically, Hyundai's plug-in electric vehicle (EV) sales surged, setting new records with 30,364 units sold in February, a 70% increase year-over-year. This included 25,172 battery electric vehicles (BEVs), up 77%, and 5,192 plug-in hybrid electric vehicles (PHEVs), up 44%. Hyundai’s top EV models in February included the Ioniq 5 with 9,990 units, the Kona Electric with 6,854 units, and the Ioniq 6 with 6,563 units. Additionally, Hyundai had a notable presence in the luxury vehicle market, with the Genesis brand achieving a 206% year-over-year growth in EV sales.

  • 2-2. Kia's Sales Performance

  • Kia also showed a significant performance in the South Korean automotive market in 2023. Kia accounted for 39% of domestic car production and saw a 4.6% increase in its sales year-over-year. In the UK market, Kia maintained its position as the fourth-largest brand, selling 96,784 units in the first ten months of 2023. During this period, Kia’s best-selling model was the Sportage, with 31,575 units sold. Additionally, like Hyundai, Kia expanded its electric vehicle lineup and sold four main EV models including the EV6 and the Niro EV.

  • 2-3. Market Share and Sales Trends

  • In 2023, Hyundai and Kia combined held over 90% of the domestic car production market in South Korea. Hyundai captured 52% of the market share, while Kia secured 39%. The South Korean car market, however, has been experiencing a declining trend with an average annual growth rate of -2.6% in recent years. This decline has been attributed to factors such as the economic slowdown, increasing popularity of electric vehicles, and semiconductor shortages affecting new car production. Notably, electric vehicles accounted for 10.4% of new car registrations in South Korea in 2022, increasing from 7.1% in 2021. Additionally, the growth in online car purchasing has been significant, with 15% of new car sales being conducted online in 2022, up from 12% in 2021.

3. Electric Vehicle Market Dynamics

  • 3-1. Hyundai and Genesis EV Sales

  • In June 2023, Hyundai Motor Company (including Hyundai and Genesis brands) reported significant growth in their electric vehicle (EV) segment. The combined wholesale shipments of Hyundai and Genesis plug-in cars amounted to 31,731 units, representing an 80% increase year-over-year (YoY). Specifically, battery electric vehicle (BEV) shipments increased by 95% YoY to 25,960 units, while plug-in hybrid electric vehicles (PHEVs) saw a rise of 32% to 5,771 units. For the year-to-date (YTD), total plug-in shipments reached 173,515 units, up 62% YoY. Hyundai's Ioniq 5 and Ioniq 6 models were key contributors, accounting for over 60% of total EV sales. In June, the Ioniq 5 led with 10,143 units, followed by the Hyundai Kona Electric with 7,877 units, and the Ioniq 6 with 6,404 units. Genesis' all-electric models, including the GV60, Electrified GV70, and Electrified G80, had wholesale shipments of 1,536 units in June and a YTD volume of 11,453 units, up 28% YoY. In May 2023, Hyundai reported that the combined wholesale shipments of Hyundai and Genesis plug-in cars were 28,321 units, marking a 25% increase YoY. BEV shipments increased by 31% to 23,415 units, and PHEVs saw a 2% rise to 4,906 units. The Hyundai Ioniq 5 continued to be a top seller with 11,772 units in May, setting a new monthly wholesale record.

  • 3-2. Kia EV Sales

  • Kia, another major player in the South Korean EV market, also saw considerable growth in its EV sales. Among their leading models, the Kia EV6 stands out, particularly with the continued rise in popularity within both the domestic and international markets. Kia has been proactive in addressing customer concerns. They initiated a recall of around 170,000 EVs, including 56,016 Kia EV6s, due to problems related to the Integrated Control Charging Unit (ICCU), which could lead to sudden power loss. Despite the recall, Kia has managed to maintain its sales momentum, largely supported by increased customer trust and proactive measures.

  • 3-3. Foreign EV Brands Performance (Tesla, Polestar, etc.)

  • Foreign electric vehicle brands like Tesla and Polestar continue to compete in the South Korean market, yet they face stiff competition from domestic brands like Hyundai and Kia. Tesla, known for its strong global presence, maintains a significant share of the market. However, specific sales figures for the South Korean market in the provided data are not disclosed. Polestar, another prominent foreign brand, also continues to strengthen its presence though detailed statistics were not provided.

4. Analysis of Popular Car Models

  • 4-1. Top-Selling Hyundai Models

  • In 2023, Hyundai Motor Group achieved significant recognition in the automotive industry. The Hyundai Ioniq 5 N was named the 2024 World Performance Car of the Year. This was the third consecutive year Hyundai won the World Car of the Year and World Electric Vehicle of the Year awards. Previous winners included the Hyundai Ioniq 5 in 2022 and the Ioniq 6 in 2023. Hyundai's Ioniq series, particularly its electric vehicles, have consistently received accolades and contributed to the company's total of 28 awards.

  • 4-2. Top-Selling Kia Models

  • Kia also showed strong performance in 2023. The Kia EV9 was part of the award-winning lineup, contributing to Hyundai Motor Group's streak of victories in the World Car Awards. Kia received a total of 27 awards during the year, positioning it favorably within the industry. This demonstrates Kia's competitive edge, particularly in the electric vehicle market.

  • 4-3. Performance of Imported Brands (BMW, Mercedes-Benz, etc.)

  • In 2023, Mercedes-Benz was the most popular non-domestic car brand in South Korea, capturing approximately 28.3% of the market share for imported vehicle registrations. German automakers, including BMW and Mercedes-Benz, dominated the non-domestic car market. However, luxury car sales faced a decline due to new regulations requiring company cars over $58,000 to have a neon green license plate. This led to a 27% drop in luxury car sales since the law's introduction in January 2023.

5. Consumer Preferences and Market Trends

  • 5-1. Preference for Domestic vs. Imported Cars

  • In 2023, Hyundai and Kia accounted for over 90% of domestic car production in South Korea. Hyundai had a 52% share, while Kia held 39%. Both automakers increased their sales, with Hyundai's sales rising by 10.6% and Kia's by 4.6% year over year. The dominance of domestic brands like Hyundai and Kia highlights a strong preference for locally produced vehicles among South Korean consumers.

  • 5-2. Growth in Eco-Friendly and Electric Cars

  • Since the introduction of Hyundai Motor Group's E-GMP platform, the number of registered electric vehicle taxis in South Korea has increased significantly, 13 times more than before the platform's launch. From 2021 to 2023, 33,400 electric vehicle taxis were registered, accounting for roughly 30% of all new taxis. In 2022, electric vehicles accounted for 10.4% of new car registrations in South Korea, up from 7.1% in 2021. Models like Hyundai's Ioniq 5 and Kia's EV6 are particularly popular, emphasizing a growing trend toward eco-friendly and electric cars.

  • 5-3. Impact of Technological Advancements on Sales

  • Technological advancements, especially in electric vehicle platforms like Hyundai's E-GMP, have had a significant impact on the market. The E-GMP platform enhances durability and battery life, leading to positive experiences for users, such as taxi drivers who frequently drive long distances. The E-GMP-based electric vehicles, such as the Ioniq 5 and EV6, have seen high adoption rates due to their reliability and economy. Additionally, new entrants like Polestar with their technologically advanced electric SUVs are shaping the competitive dynamics, despite the market being largely dominated by domestic brands. However, the shortage of semiconductors has posed challenges, affecting the production and availability of new cars.

6. Challenges and Recalls in the Automotive Market

  • 6-1. Hyundai and Kia Vehicle Recalls

  • Hyundai Motor and Kia are recalling approximately 170,000 electric vehicles (EVs) due to potential sudden power loss issues. This recall affects models such as the Hyundai Ioniq 5, Ioniq 6, Genesis GV60 and Kia EV6. The problem originates from the Integrated Control Charging Unit (ICCU), responsible for powering both the hybrid vehicle battery and the low-voltage battery. The recall is significant as it is the largest since 2021 and impacts around 600,000 EVs globally. Hyundai and Kia have faced years of customer complaints regarding the ICCU issues. The recall is scheduled to start on March 18, with the companies updating the software or replacing the faulty ICCUs as necessary.

  • 6-2. Impact of Semiconductor Shortages

  • The automotive industry has been heavily impacted by semiconductor shortages, causing production delays and limiting the availability of new vehicles on the market. This global issue has disrupted the manufacturing process for many carmakers, including those in South Korea such as Hyundai and Kia. The shortage has forced these companies to prioritize certain models over others and scale back production. This ripple effect has influenced both consumer supply and corporate revenues negatively.

  • 6-3. Consumer Complaints and Resolutions

  • Consumer complaints have significantly increased due to the ICCU issues in Hyundai and Kia's EV models. Complaints primarily focus on sudden power loss, with some consumers sharing experiences of their cars stopping unexpectedly. In response, Hyundai and Kia initially offered free parts replacements and have now issued a large recall to resolve the issues. The U.S. National Highway Traffic Safety Administration (NHTSA) has been investigating these problems, noting that over-current within the ICCU can damage transistors, leading to power failures.

7. Glossary

  • 7-1. Hyundai Motor Company [Company]

  • Hyundai remains a dominant player in the South Korean automotive market, with significant sales and market share. The company's focus on electric vehicles and technological advancements has contributed to its leading position.

  • 7-2. Kia Motors [Company]

  • Kia, a subsidiary of Hyundai Motor Group, holds a substantial market share in South Korea. Known for its popular models such as the Sportage, Kia has also been expanding its eco-friendly vehicle lineup.

  • 7-3. Tesla [Company]

  • Tesla is a major player in the electric vehicle market globally and in South Korea. Its models such as the Model Y and Model 3 are popular among South Korean consumers.

  • 7-4. Genesis [Brand]

  • Genesis, Hyundai's luxury brand, is known for its high-end models like the G80 and GV80. It has been expanding its electric vehicle lineup to include models like the G80 EV.

  • 7-5. Electric Vehicles [Technology]

  • Electric vehicles (EVs) represent a growing segment in the South Korean market, driven by advancements in technology and a shift towards more sustainable transportation options.

8. Conclusion

  • This report illustrates the current state of the automotive market in South Korea, highlighting the dominant presence of domestic brands like Hyundai and Kia, the rising trend in electric vehicle sales, and the competitive dynamics among imported brands. Despite certain challenges, the market shows a strong inclination towards sustainable and technologically advanced vehicles.

9. Source Documents