Customer Logins
Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Customer LoginsSUV sales in South Korea grow 13.2% y/y during H1 – IHS Automotive data
SUV sales are growing in South Korea, mainly thanks to advanced technologies, stylish bodies, fuel efficiency, space, and off-road capability.
IHS Automotive Perspective
- Significance: Sport utility vehicle (SUV) sales in South Korea grew by 13.2% year on year (y/y) to 251,417 units during the first half of 2016, according to IHS Automotive data.
- Implications: The SUV market in South Korea has increased significantly in the past five years, mainly thanks to advanced technologies, stylish body, fuel efficiency, space, and off-road capability. Furthermore, the B-segment SUVs have lured younger customers in the country who prefer the smaller, more fuel-efficient models with affordable price tags over more traditional A- and B-segment vehicles.
- Outlook: IHS Automotive expects South Korean SUV sales to grow by 9.9% y/y to 535,007 units in 2016, capturing a market share of 28% (up 1 percentage point). Around seven new or refreshed SUV models are expected to be launched in the rest of 2016.
Sport utility vehicle (SUV) sales in South Korea grew by 13.2% year on year (y/y) to 251,417 units during the first half of 2016 to make over 25% of the light-vehicle market share in the region, according to IHS Automotive data.
The D-SUV segment remained the most popular, capturing an overall market share of 12.1% and sales of 110,363 units (up 12.8% y/y). Kia's Sorento R was the top-selling model, contributing 43,912 units (up 13% y/y), followed by the Hyundai Santa Fe with sales of 41,178 units (up 9.5% y/y). C-SUV followed in market share terms with sales of 95,264 units (up 6.9%) and a market share of 10.4%. Sales in this segment were led by Kia's Sportage R with 36,110 units, up from 17,234 units in the corresponding period last year. The Hyundai Tucson ix was the second best-selling model in the segment. Sales of the vehicle grew by 5.1% y/y to 31,741 units during the first six months of 2016. However, the highest growth figures came in the B-SUV segment with sales of 36,594 units (up 31.6% y/y) and market share of 4%, largely driven by the introduction of the home-grown SsangYong Tivoli, which led sales in this category with 27,969 units (up 51% y/y). It was followed by Chevrolet Trax with just 5,354 units (up 0.9% y/y). In the luxury segment, foreign imports dominate as E-SUV segment grew by 26.9% y/y to 9,196 units, but capturing a market share of just 1% during the period. Sales in the segment were led by newly launched Mercedes-Benz GLE with 1,487 units, followed by Land Rover Discovery with sales of 1,420 units (up 25% y/y) during the period.
Outlook and implications
After strong growth of 9.2% y/y to 929,015 units during the first half of the year, new vehicle sales in the country declined 12.6% y/y in July, which resulted in year to date (YTD) growth in sales slowing to 5.9% y/y to 1,065,888 units. The slump in domestic vehicle demand during July is largely due to the phasing out of temporary tax benefits in June, which pulled up demand in the previous months. Segment-level data for the first seven months of the year were not available at the time of writing this report.
Meanwhile, the SUV market in South Korea has increased significantly in the past five years, part of a global trend to SUV's, mainly driven by changing consumer preferences, preferring tall driving positions, internal space, and active lifestyle image. Share of SUVs in the country's light-vehicle market has grown from 15.6% in 2011 to 27% in 2015, according to our data.
Another prominent trend is the emergence of B-segment SUVs. The surge in models in the compact SUV categories have lured younger customers in South Korea who prefer the smaller, more fuel-efficient models with affordable price tags over more traditional A- and B-segment vehicles. The segment has also attracted customers from the C-Car segment. According to our data, the B-SUV category grew from 15,896 units in 2014 to 67,091 units in 2015. The segment's market share went up from 1.0% in 2014 to 3.7% in 2015. Market share of the A-Car segment went down 1.5 percentage point to 8.2% in 2015, while the B-Car segment's share declined 0.2 percentage point to 1% and the market share of the C-Car segment fell 2 percentage point to 12.6% during the year.
As many as seven nameplates in the B-SUV segment drew consumers in the first six months compared to just five last year. SsangYong's Tivoli is the segment leader, and new additions to the segment included imports such as FCA's Jeep Renegade and Fiat 500X. Hyundai Group's only player in the B-SUV segment, the Kia Soul, will be joined by both Hyundai and Kia versions of a B-CUV in 2017, which will help the group to capture a forecast 30.6% share of the B-SUV segment during that year. Currently the Soul is forecast to capture just a 3.6% share in 2016.
Looking ahead into 2016, IHS Automotive expects the end of the SCT relief will result in a slump in local sales in the coming months. Nevertheless, this will be offset by new model launches, sales promotions, and discounts. We forecast that light-vehicle sales in the country will grow by around 6.1% y/y to 1.91 million units in 2016. This split between passenger car sales of 1.70 million units (up 6.1% y/y), and light commercial vehicle (LCV) sales of 217,046 units (up 6.2% y/y). Sale of SUVs in the country is expected to grow by 9.9% y/y to 535,007 units during the year, capturing a market share of 28% (up 1 percentage point). Around seven new or refreshed SUVs are expected to be launched in the coming months of 2016. SUV sales in the country during the year will be led by the Kia Sorento with sales of 88,120 units (13.3% y/y). It will be followed by Hyundai Santa Fe with 83,138 units, despite being forecast to register 10.5% y/y decline. Furthermore, the B-SUV segment will register growth of 19.1% y/y to 79,933 units during the year, capturing a market share of 4.2% (up 0.5 percentage point).
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.