South Korea new car sales plunge in January because of Lunar Year Holiday image

All five South Korean carmakers, except Ssangyong Motor, posted double-digit falls in domestic sales last month, when the Lunar New Year holiday took place.

Car sales are expected to fall this year as the South Korean economy is slowing and competition is heating up when the free trade deal with the U.S. takes effect early this year.

Hyundai Motor Company sales in South Korea fell 18.5 percent, while overseas sales helped the carmaker post a 3.5 percent rise globally. “Fewer working days is the biggest reason for the sales drops in January. Hyundai’s sales from its plants in India, the United States and Czech Republic rose by double-digit percentages, whereas China factory sales fell because of Lunar New Year holidays,” Lee Sang-hyun, an analyst at NH Investment & Securities, was quoted as saying by Reuters.

Kia Motors Corporation also saw its sales fall by 15.5 percent in its home market, for the first time in nearly three years. “The sales outlook of Kia is not bright this year as domestic sales are seen declining 1.1 percent, global auto market growth is seen slowing and overseas rivals are stepping up competition,” Kia said in a statement.

Hyundai and Kia reported smaller quarterly profits last month and said they expect global sales growth to halve to 5.7 percent and 9.5 percent, respectively.