In 2015, in the Korean passenger car market, the sales of mini and large cars will increase and those of mid-size cars will decrease, further aggravating bipolarization. The bipolarization of the Korean society and the nuclearization of families also affected the automotive market.
According to the Korea Automobile Manufacturers Association and the Korea Automotive Research Institute on December 16, in the domestic passenger car market, the sales of mini and large cars will increase and those of mid-size and compact cars between mini and large cars will decrease to the 3-year low proportion. Bipolarization by size of car in the automotive market will worsen.
According to the ‘Korean Auto Industry Outlook for 2015,’ published by the Korea Automobile Manufacturers Association, the sales of mini cars in the coming year is forecast to go up by 1.2% to 185,000 cars. The new-car effect, e.g. GM Korea`s follow-up model of the Spark, and government support are attributed to the sales increase. The sales of large models are also expected to rise by 0.6% next year to 166,000 cars thanks to the new-car effect, e.g. the ASLAN and the New Equus.
In the meantime, both the Korea Automobile Manufacturers Association and the Korea Automotive Research Institute have a bleak outlook for the sales of mid-size cars. Although Kia Motors is scheduled to release a new K5, they predicted that 194,000 mid-size cars will be sold next year, down 2.3% year on year.
Also, the sales of compact cars, another segment, are also forecast to decline by 2.6% next year despite the planned follow-up model of the Avante. The sales share of compact cars and mid-size cars are expected to be 18% and 16.6% respectively, the lowest level in 3 years.
The segment, to which the decreased demands for mid-size cars will flock, was thought to be the SUVs. Next year the sales of SUVs are forecast to go up by 4.1% over this year to 345,000 cars, the highest figure in history. The segment share is expected to be 29.5%. The SUVs are expected to remain as the largest segment.
After all, the income bipolarization and nuclearization are thought to have affected the automotive market too. The mid-size car`s traditional position as the `family car` of the middle class has disappeared.
“Due to the burden of fuel efficiency and household debts, mid-size models are becoming the `sandwiched segment.`” said an insider of the Korea Automobile Manufacturers Association. “People in the high-income bracket buy a mini car as a second car, and most of them buy large cars on many occasions. So the new-car effect is not appearing for the mid-size car, the traditional ‘family car.’”
He added, “Even if they can afford to buy a mid-size car, as there are not many people in the family, they are more inclined to purchase a little more expensive foreign-made compact cars.”
Song Joon-yeong | songjy@etnews.com