SEOUL, June 14 (Korea Bizwire) — Automakers in South Korea are grappling with a decline in output and lower demand amid the coronavirus pandemic, industry sources said Sunday, with some of them seeking to cut costs and secure cash via asset sales.
Auto output in the country reached 1.33 million in the first five months of the year, the lowest since 2009 when the comparable figure was 1.21 million, according to the data from the Korea Automobile Manufacturers Association (KAMA).
For one, GM Korea logged the lowest production of 136,000 units in the January-May period since 2005, and SsangYong Motor Co. suffered a 38 percent on-year drop in its production to 38,200 units in the first five months of the year, the data showed.
In May alone, Hyundai Motor Co. and four other automakers produced a combined 230,000 units, the lowest for May in 21 years.
Vehicle sales plunged 36 percent last month from a year earlier to 423,000 units.
In overseas markets, things are not good as well. The country’s auto exports more than halved in May from a year earlier due to falling demand in the face of the new coronavirus pandemic.
Local carmakers shipped 95,400 units of cars overseas last month, down 57.6 percent from a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.
In terms of value, auto exports also fell 54.1 percent over the period to reach US$1.81 billion.
From January to May, the five carmakers sold 2,471,186 vehicles, down 22 percent from 3,187,474 a year earlier.
In the first five months of 2020, the country shipped 693,805 units of cars, down 32.6 percent on-year, the data also showed.
Against a decline in output and lower demand, some automakers are in a hurry to cut costs and sell assets to tide over the virus-caused slump.
GM Korea cut wages for its executives and is considering selling a logistics center west of Seoul.
Renault Samsung is also seeking to shut down some of its service centers across the nation, and SsangYong Motor has decided to sell its service center in Seoul to secure cash.