End of tax cut casts shadow on H2 auto sales

By Korea Herald

Published : July 1, 2016 - 17:46

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[THE INVESTOR] The outlook for South Korea's automotive market in the second half of the year appears uncertain with the special tax cut ending as of July 1.

The special consumption tax cut which was introduced to boost consumption ended on June 30. The government had cut the special consumption tax rate from 5 percent to 3.5 percent in August 2015 as a temporary measure.

While the measure contributed to first half sales rise, its ending is expected to weigh down local carmakers in the second half.

GM Korea's robust June sales were largely driven by the revamped Malibu sedan. / GM Korea

For the first half of the year, local carmakers’ domestic sales rose 10.9 percent from a year earlier, boosted by the temporary tax cut and new models.

However, exports dropped 4.2 percent over the same period, bringing the total down by 1.7 percent to about 4.36 million units.

According to the five carmakers, domestic sales in the first half came in at 812,265 units

By carmaker, Hyundai Motor Group’s Hyundai Motor and Kia Motors took up the majority share. Hyundai Motor and Kia Motors respectively sold about 351,000 units and 276,000 units in the local market. Compared to the same period last year, Hyundai Motor’s sales rose 4.5 percent, while that of Kia Motors rose 14.1 percent.

GM Korea’s domestic sales soared 21.6 percent to set a new first half record of nearly 87,000 units, while Renault Samsung’s first half sales saw a 9.7 percent rise.

Ssangyong Motor’s sales during the first half of the year rose 7.1 percent from a year earlier.

By Choi He-suk (cheesuk@heraldcorp.com)

Korea Herald
Korea Herald
Articles by Korea Herald

End of tax cut casts shadow on H2 auto sales

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