(MENAFNEditorial)
Sales
According to the Korea Automobile Manufacturers Association domestic auto sales declined 0.2% year-on-year (y-o-y) in October 2014 to 122247 units. This brought sales for the first 10 months of 2014 to 1181225 units an increase of 2.9% y-o-y and in line with our full-year growth forecast of 3.2%. In 2015 we forecast sales to grow 2.7% as steady growth in private consumption bolsters demand for consumer durables.
Strikes Fuel Long-Term Production Woes
On the production side plant workers at Hyundai and Kia held their first strike of 2014 in August demanding higher wages and improvements in working conditions. Similar strikes in previous years resulted in output declines of 16.1% y-o-y and 25.9% y-o-y in 2012 and 2013 respectively during the months of August and September ( see 'New Labour Dispute Adds To Hyundai's Woes' April 23 2013).
Full Report Details at
- http://www.fastmr.com/prod/962502_south_korea_autos_report_q2_2015.aspx?afid=101
While strikes have not appeared to derail growth in South Korean auto production we believe these are worrying trends that will add to the already high labour costs for automakers. In March 2014 Hyundai announced that it will build its fourth plant in China bringing the carmaker's total capacity in the country to 2.3mn a year (beginning 2016) from the 2mn in 2014. We foresee more automakers with domestic manufacturing bases cutting down on production in South Korea and instead pursuing localisation in growing markets such as China to maintain price competitiveness.
We believe that concerns over Hyundai's payment of KRW10trn (USD10bn) for a plot of land in the Gangnam district for the purpose of building a global business centre - which has raised doubts about the company's corporate governance - are likely overblown. Meanwhile employees of Hyundai have also held strikes in September 2014 as talks with management over employment contracts broke down with workers blaming the disruption in wage discussions on the land purchase.
The South Korea Autos Report features the latest data and forecasts covering production sales imports and exports.
BMI Research's South Korea Autos Report provides industry professionals and strategists corporate analysts auto associations government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in South Korea.
Key Benefits
* Benchmark BMI's independent automotives industry forecasts on South Korea to test other views - a key input for successful budgetary and planning in the Korean automotives market.
* Target business opportunities and risks in the Korean automotives sector through our reviews of latest industry trends regulatory changes and major deals projects and investments in South Korea.
* Assess the activities and market position of your competitors partners and clients via our Competitive Landscape Analysis.
Coverage
BMI Industry View
Summary of BMI’s key industry forecasts and views covering production sales and the introduction of new technology or products.
Industry SWOT Analysis
Analysis of the major Strengths Weaknesses Opportunities and Threats within the autos sector and within the broader political economic and business environment.
BMI Industry Forecasts
Historic data series and forecasts to end- 2019 for all key industry indicators (see list below) supported by explicit assumptions plus analysis of key downside risks to the main forecast including:Sales and production of motorcycles in units; total production of units; production by vehicle type (including cars commercial vehicles trucks and buses); total vehicle fleet size in units; sales by vehicle type including passenger cars and commercial vehicles; fleet size by vehicle type including passenger car commercial vehicles and motorcycles; total vehicle trade balance in units; vehicle trade balance by vehicle type including passenger car commercial vehicle and motorcycle; car ownership measured as car density per 1000 people.
BMI’s Autos Risk Reward Index
BMI’s Risk Reward Index provides investors (manufacturers suppliers and dealers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry economic and demographic data points. These provide indices of highest to lowest appeal to investors with each indices explained.
BMI Economic Forecasts
BMI forecasts to end-2019 for all headline macroeconomic indicators including real GDP growth inflation fiscal balance trade balance current account and external debt.
Company Profiles*
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles enabling a full evaluation of recent company performance and future growth prospects.
Global Regional and Country Industry Overviews
In-depth analysis of the major global and regional developments in the market which can be linked with the country industry overview providing cross-country investment product and financing trends that will affect each market supported by BMI’s global and regional industry forecasts.
Sources
The Autos reports draw on an extensive network of primary sources such as manufacturing associations statistical bureaus government transport ministries national chambers of commerce and industry national statistical offices government ministries and central banks and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.
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