South Korean carmakers today posted a 5.6 percent rise in January sales from a year ago, helped by a jump in local sales as companies spent more on marketing.
But Hyundai Motor Co. reported a 2.2 percent fall last month after its output was disrupted by a bonuses dispute with its labor union.
Hyundai and other South Korean automakers are expected to face challenges on their sales this year amid cut-throat competition with global peers and weak consumer sentiment in Asia's third-largest economy, analysts said.
South Korea's automakers plan to launch few new models to boost sales, they added.
"You can't say domestic auto sales began to show signs of recovery on the basis of one-month's data, (especially) as automakers paid more incentives to customers," said Nam Kyung-moon, an auto analyst at Hanwha Securities.
"Sales are seen remaining under pressure as they do not have enough new models at home and abroad to lure customers to showrooms," he added. But some predict local sales will pick up in 2007, helped by replacement demand.
"South Korean drivers cannot keep delaying replacement of their old cars," said Suh Sung-moon, an analyst at Korea Investment & Securities. Combined January vehicle sales at South Korea's five automakers rose to 413,119 vehicles from 391,220 a year earlier.
But January's figure is 14 percent lower from a revised 480,743 vehicles in December 2006.
Exports gained 3.4 percent to 318,753 vehicles from a year before, with domestic sales up 13.7 percent to 94,446.
Auto sales abroad, which account for 10 percent of the country's total exports and are an important driver of growth in Asia's third-largest economy, increased an estimated 12.5 percent in value during January from a year earlier, commerce ministry data showed.
Hyundai, the world's sixth-largest automaker by sales volume along with its affiliate Kia Motors Corp., sold 201,865 vehicles in January, compared with 206,377 sold a year ago, Hyundai said in a filing with the Korea Exchange.
Hyundai said a partial strike and overtime boycott by its unionized workers from Jan. 3 to Jan. 17 in a bonus dispute cost the company 18,513 vehicles or $284.6 million (266.8 billion won) in lost output.