If the local auto industry saw its biggest domestic sales and the rise of compact SUVs in 2015, customers will likely see more environmentally friendly vehicles in 2016.
Domestic vehicle sales reached a record 1.8 million this year, with imported carmakers taking another 23 percent jump in sales growth at 220,000.
Compact SUVs, including Renault Samsung’s QM3, GM Korea’s Trax and Ssangyong’s Tivoli, have emerged as hot as ever, doubling the sales growth of such vehicles two years in a row.
Hyundai Motor’s launch of its new luxury Genesis, aiming to compete against German luxury carmakers, has also made a big mark in the local car industry.
However, the upcoming year will see a slimmer market, down 3 percent from this year, and it will be greener, with more SUVs.
The five local automakers’ sales have been predicted to slip 4.6 percent to 1.47 million next year, but the imported automakers’ sales have been forecast to go up 7.7 percent to 280,000, according to the recently released Korea Automobile Manufacturers Association’s (KAMA) annual outlook.
“With the temporary tax cut on automobiles, we have consumed part of next year’s demand early. Coupled with unfavorable market conditions abroad, the local automotive industry will see slower demand and exports,” said Lee Hang-koo, a researcher at the Korea Institute for Industrial Economics and Trade. “However, following the global market trend, cars will become greener and smarter next year.”
Local carmakers will launch environmentally-friendly cars, while global electric vehicle manufacturers are expected to join in the local green car market.
The nation’s largest carmaker, Hyundai Motor, will begin the year by launching the eco-car model, Ioniq, a hybrid sedan developed with a hybrid-only platform. A plug-in hybrid and electric vehicle powertrains will be added.
The Ioniq will compete against the Toyota Prius.
At present, only Toyota and Honda have hybrid-only models.
Hyundai’s sibling, Kia Motors, will also launch the Niro hybrid compact SUV in April, which will see a plug-in hybrid model later.
Hyundai earlier announced that it plans to increase the number of environment-friendly models from seven to 22 by 2020.
“Hyundai Motor’s two keywords for next year will be green and luxury. It will be a year that we will work more on brand value than numbers. Although the local eco-car market is comparatively small, we are working hard for successful launches of our hybrid models and also the overseas launch of the EQ900 (G90 overseas) luxury sedan,” said a Hyundai official.
GM Korea will join in the green race by launching the Chevrolet Volt. The car that the company calls a “game changer” is an extended range electric vehicle that can go up to 80 kilometers using its battery, more than double the distance an average plug-in hybrid can go. “With the Volt, we are going to expand our eco-friendly car lineup next year,” said a GM Korea official.
Also fueling the green drive here will be global electric vehicle manufacturers’ entry into the local market. Tesla, which recently registered its local office here, has been widely expected to sell electric cars within the next year, while China’s electric vehicle giant, BYD, already closed a contract with a local partner to supply K9 electric bus and E6 electric taxi models beginning next year.
The K9 bus can travel over 300 kilometers on a single charge and on the roads of many countries including the U.S., U.K. and the Netherlands.
The popularity of SUVs has been forecast to continue next year, boosted by low fuel prices and widespread leisure activities.
The SUV sector will see a slight gain in sales at 450,000, staying the best-selling segment of the market, accounting for 37 percent of all car sales next year.
Mercedes-Benz Korea aims to double its share of the SUV market in 2016, boosting its sales to 14 percent from its current 7 percent. “The SUV segment is an important contributor to our growth and can play a larger role in bolstering our presence in Korea. Our SUV offensive is in full swing and we will keep our SUV story rolling for 2016,” said M-B CEO Dimitris Psillakis. Starting with the new GLE full-size SUV and midsized GLC SUV to be launched in January, the company will also launch the latest GLS and GLE coupes during the year, expanding its overall SUV lineup.
BMW Korea will grace the start of the year by launching the all new X1 compact SUV, aiming to lure a wider spectrum of customers, while Audi Korea will launch the premium SUV Q7. Italian luxury carmaker Maserati’s first SUV, Levante, and Jaguar’s first SUV, F-Pace, will make the SUV market richer but fiercer.