A Korea Automotive Research Institute (KARI) report states that the country’s automotive market will likely contract by 1% year-on-year in 2013. The institute attributes this primarily to a slowdown in the Korean economy.
South Korean news agency Yonhap, citing the report, said car sales are expected to drop to 1.53 million units next year, compared with 1.55 million units expected for the full year 2012. The forecast for this year is a 2.1% decline on 2011 levels.
In addition to the slowdown in the economy, KARI believes that factors such as the closure of tax reduction benefits and a lack of new model launches will depress car sales in the country. The government cut special consumption taxes on vehicles in August 2012, but this programme is scheduled to end at the end of this year.
While the outlook for the domestic automotive market is down, KARI expects automotive exports from the country to grow by 1.2% compared with the figures expected for full year 2012 to 3.31 million vehicles. Production too is expected to rise in 2013, albeit by a modest 0.4%, to 4.71 million units.
The research institute has also predicted a 3.9% increase in imported car sales in South Korea, at 134,000 units. Imported car sales are expected to rise 20% this year.
According to the Yonhap report, KARI has also predicted a slowdown in global automotive sales next year. Global car sales are expected to increase by 3.4% to 80.8 million. This compares with an estimated 11.9% increase in sales this year. The institute expects markets in the US and China to grow steadily, while Europe is expected to remain nearly flat, the report said.
