SUVs: Name of the game in 2023 South Korean auto market

Back in the 1970s, when simply having a car was a status symbol in South Korea, a four-door passenger sedan was the car of choice. And Hyundai Motor Co.'s Pony, the country’s first mass-produced sedan, was a dream car for many.

Fast forward more than 50 years, it is no exaggeration to say that Koreans are in love with sport utility vehicles, so much so that six out of every 10 vehicles on the road are SUVs. Sedans are now out in the cold.

According to Seoul-based automotive data provider CarIsYou, SUVs accounted for 61.4% of all vehicle registrations in Korea in the first 11 months of this year.

With less than one month to go before the year’s end, the ratio of SUVs versus the total will certainly rise above the 60% threshold for the first time on an annual basis, analysts said.

Just a decade ago, SUVs accounted for about a third of the Korean car market, with new SUV sales at 460,470 units in 2014. Since then, the SUV proportion has steadily increased to break the 40% resistance line in 2017 and rise above 50% just a few years later.

In 2019, SUVs outsold sedans for the first time in Korea. The gap widened to 121,000 more SUVs than sedans in 2020, and then a difference of 242,000 units in 2021 and 343,000 vehicles last year.

MESMERIZED BY FUEL EFFICIENCY, COMFORT, SPACIOUS INSIDE

Mesmerized by their high fuel efficiency and comfortable ride – this as a result of technological advancement – and versatile use of space inside, SUVs have become the name of the game in Korea’s vehicle sales market.

According to the Korea Automotive Technology Institute, the appeal of sport utility vehicles in Korea is stronger than the global trend. SUVs accounted for 40.8% of the world’s automobile sales in 2022.

CarIsYou data showed new SUV registrations, including those of recreational vehicles (RVs) with more seats, reached 856,362 units in the January-November period – the highest since 2014 and above last year’s full-year number of 837,948.

Given the average monthly SUV registration of 77,851 units in the first 11 months of this year and the usually stronger SUV sales in the fourth quarter compared to the three preceding quarters, this year’s new SUV registrations are sure to exceed the 900,000 milestone, industry officials said.

Of the 10 best-selling cars sold in the January-November period, seven were SUVs, according to CarIsYou.

Hyundai Motor’s luxury sedan Grandeur was the bestseller, followed by affiliate Kia Corp.'s Sorento SUV, Kia’s Carnival MPV and Kia’s compact Sportage SUV.

UPPING THE ANTE

Korea’s three leading carmakers – Hyundai, Kia and KG Mobility Corp. – said this summer they are upping the ante in their battle to take a greater share of the fast-growing mid-sized SUV market by launching sleek and stylish new models.

In September, KG Mobility, which specializes in SUVs, launched the Torres EVX, its first EV model since the company changed its name from Ssangyong Motor Co. in March.

A month earlier, Hyundai Motor, Korea’s top carmaker, started selling its latest, all-new Santa Fe – a drastically revamped flagship model, which fiercely competes with the Kia Sorento.

The showdown comes as foreign carmakers, including Toyota, Tesla and Mercedes-Benz, also bring their flagship models to challenge Korean peers on the SUV turf.

Mid-sized SUVs have become increasingly popular among Korean drivers as family cars thanks to their affordable prices, and their sales growth will continue into next year, industry watchers said.

Write to Sungsu Bae at baebae@hankyung.com

In-Soo Nam edited this article.