SEOUL, Sept. 16 (Korea Bizwire) – Sales of city cars in South Korea decreased for the 20th month in a row as popularity for the small, practical vehicles decline amid rising demand for crossovers, industry data showed Sunday.
The total number of mini urban haulers with an engine displacement of under 1,000 cc stood at 11,068 units as of July, down 2.2 percent from a year earlier, numbers provided by the Korea Automobile Manufacturers Association (KAMA) showed.
“Car buyers are turning more to crossovers and slightly larger passenger cars that is causing sales to fall for city cars,” a KAMA source said.
In the first seven months of 2018, total city car sales reached 73,177 units, a drop of 10.6 percent from 81,864 vehicles sold in the same period last year.
There are four city cars sold in Asia’s fourth-largest economy with Kia Motors Corp. making the Morning and Ray, GM Korea Co. churning out the Spark, and Renault Samsung Motors Corp. assembling the Twizy.
City cars, which receive considerable tax and operating benefits, are cheaper to buy and run. On the other hand, they have generally weaker driving characteristics with their small size hurting safety to some extent.
In addition, the fuel economy does not greatly exceed small vehicles sold on the market today, and they suffer from smaller overall space for people and cargo.
Annual city car sales had surpassed the 200,000 mark in 2012, but KAMA said numbers have been trailing off from 2014 onward. It fell to 173,418 units in 2015 and stood at 138,895 last year.
Industry experts said that one of the main reasons for the weaker numbers is the launch of sub-compact SUVs, such as Hyundai Motor Co.’s Kona, Kia’s Stonic, Renault Samsung’s QM3 and the Tivoli by SsangYong Motor Co.
Reflecting this, sales of such small SUVs reached 147,429 units as of last year, up 12.3 times in just four years. The increase ate into the city car sales.
“In addition to SUVs, local demand for more upscale cars is hurting smaller vehicles with the entry luxury level Hyundai Grandeur being considered as a model best suited for the middle class,” a market watcher said.
He said not too many years ago Hyundai’s Sonata midsize car was viewed as the car for the middle class with the Grandeur, sold as the Azera in the U.S., being considered a car for the more affluent.