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| The 2018 Hyundai Accent / Yonhap |
By Kwak Yeon-soo
Subcompact cars are losing ground fast in the domestic market as more motorists prefer to drive compact SUVs and midsize sedans, according to industry officials Monday.
The Korea Automobile Manufacturers Association (KAMA) said among new cars registered in 2018, only 10 percent were subcompact cars.
The number of new subcompact cars fell 8.1 percent year-on-year to 129,572 in 2018, while the number of new compact cars was 23,185, down 23.1 percent from the previous year.
"Subcompact and compact cars, which have maintained a capacity of 200,000 per year, have shrunk as they were not able to secure advantages in the competition with SUVs and midsize sedans," a KAMA official said.
Subcompact cars used to appeal strongly to entry-level buyers and small families until automakers started rolling out smaller and cheaper SUVs in 2013.
While automakers are producing SUVs and sedans that are safer, more practical and more comfortable, car buyers are continuing to flock to larger vehicles.
"Sales of small SUVs are expected to grow as automakers are readying to release a variety of SUV models. By contrast, they are downsizing production of subcompact cars," a GM Korea official said.
GM Korea discontinued Chevrolet's subcompact car Aveo in March.
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| The 2019 Hyundai Venue / Courtesy of Hyundai Motors |
The growing demand for SUVs and midsize sedans are evident in industry data.
According to KAMA and the Korea Automobile Importers and Distributors Association, domestic and imported carmakers sold 612,043 vehicles from January to May, with SUVs accounting for 42 percent.
"The proportion of SUVs in passenger car sales is expected to exceed 50 percent at the end of this year, given the current pace of growth," a KAMA official said.
Another industry official said car buyers are shunning subcompact cars because they now prefer bigger, roomier cars.
"Small cars are still an economical alternative to larger sedans, but there is a change in consumer preference. They are willing to pay more to buy midsize sedans like the Sonata, K5 and Grandeur for added features and comfortable rides," a Hyundai Motor official said. "Meanwhile, the surging popularity of SUVs is a universal trend as they boast practicality.
The official said Hyundai Motor has sold 300 to 400 Accent subcompact cars a month, compared to 3,000 sold monthly in 2012.
"We may suspend production of the Accent in Korea, but not in foreign markets," the official said.
Hyundai plans to continue to add competitive SUV models to its lineup ― the entry-level Venue SUV and the GV80 SUV, the first luxury SUV model under the independent Genesis brand, later this year. Kia plans to introduce the Seltos entry-level SUV next month.
