The Casper EV (Image courtesy of Hyundai Motor Co.)
SEOUL, Nov. 7 (Korea Bizwire) – In a departure from the traditional pattern where economic downturns boost compact car sales, South Korea’s compact vehicle market is experiencing a significant decline, with annual sales expected to fall below 100,000 units for the first time since 2021.
According to data from Kais You Data Research Institute, compact car sales plummeted 45.7% year-over-year in October, with just 5,838 units sold. The cumulative sales from January to October reached 83,883 units, marking an 18.2% decrease from the same period last year when 102,485 units were sold.
If this downward trend continues through the remaining two months of the year, industry analysts predict that annual compact car sales will likely fail to surpass the 100,000-unit mark.
The Korean Automobile Mobility Industry Association (KAMA) reports that domestic compact car sales peaked in 2012 with 216,221 units before beginning a steady decline, bottoming out at 98,781 units in 2021.
The market experienced a brief revival with the September 2021 launch of Hyundai’s first compact SUV, the Casper, which helped boost annual sales to 134,294 units in 2022. The introduction of the Ray EV, equipped with a 35.2kWh lithium iron phosphate battery, maintained momentum with sales reaching 124,080 units last year.
Industry experts attribute the current decline to shifting consumer preferences toward larger, more premium vehicles, particularly recreational vehicles (RVs).
The absence of new compact car models has also contributed to the downturn, with even the Casper EV being classified as a small car rather than a compact car due to its increased dimensions.
Automakers’ focus on more profitable mid-size and large vehicles rather than the less lucrative compact car segment has further accelerated this trend.
“The compact car market continues to struggle amid weakening vehicle demand due to the economic downturn and strong consumer preference for larger vehicles,” said an automotive industry representative.
“Unless we see the introduction of a groundbreaking new model in the market previously dominated by the Morning, Ray, and Spark, this downward trend will be difficult to reverse.”
Kevin Lee (kevinlee@koreabizwire.com)
