SEOUL -- Hyundai Motor Co. and other South Korean car makers reported on Wednesday a combined 16 percent rise in May sales from a year ago on solid exports, but production stoppages at some plants saw sales dip from April.
Analysts warned of a grim outlook for the sector, with local consumers reluctant to spend and export growth showing signs of slowing. Upcoming wage negotiations at major automakers could also lead to industrial action and dent sales, they added.
"Domestic sales are very disappointing. The effect of new models are tapering off even before they draw full attention from customers," said Suh Sung-moon, a Dongwon Securities analyst. "Without any massive economic stimulus, it doesn't appear realistic to anticipate a significant recovery in consumption. Labor disputes in June could drag on sales as well."
Exports by the country's five automakers, which have held up well in recent months, saw a heady 22 percent rise to a combined 336,022 units in May from a year earlier.
That compared with a stubbornly weak local market, where combined sales declined around 1 percent to 90,381 vehicles. Overall car sales last month rose to 426,403 from 367,542 a year ago. Total sales declined 2.3 percent from April.
The South Korean data came as Japanese auto dealers reported a 7.0 year-on-year increase in May car sales, with minivehicle sales up 8.3 percent.
South Korea's top carmaker Hyundai, the world's seventh-biggest auto firm, sold 202,087 vehicles in May, up 6.6 percent from 189,644 units a year ago, on healthy exports of Sonata sedans and Tucson SUVs to the key United States market.
Exports jumped 9.2 percent to 156,266 units, while local sales fell 1.4 percent to 45,821 units.
But total sales declined 5.1 percent from the previous month, as the firm had to halt production at its Chinese plant for rebuilding work that will double its capacity to 300,000 units a year, a Hyundai spokesman said.
"The U.S. sales were robust, helped by rising popularity of Sonata sedans and other SUVs. Had it not been for production suspension in China, the sales would have risen from April as well," Hyundai spokesman Park Sang-woo said.
Hyundai officially opened its first U.S. plant in Alabama last month, aiming to take a firmer foothold in a market where its sales have more than quadrupled over the last six years to become the fourth-largest import brand.
The fate of the plant is seen by analysts as a litmus test for Hyundai's success in the world market.
Hyundai expects its U.S. sales to rise about 16 percent this year to 485,000 vehicles, winning market share from struggling auto giants General Motors and Ford Motor Co.
Cars built and sold overseas are also counted as exports.
Hyundai's affiliate Kia Motors Corp. said its May sales rose 17 percent to 104,647 units, buoyed by a 21 percent jump in exports. Local sales gained 5.9 percent to 22,100 units.
But sales were down from April after a shortage of engines caused a brief stoppage at a plant making Carnival minivans and Pride compact cars, a Kia official said.
In the run-up to the launch of a new model, Ssangyong Motor Co., owned by China's Shanghai Automotive Industry Corp., slashed production for a lineup change last month which hit its sales. It slid 47 percent to 6,769 units.
GM Daewoo Automotive and Technology Co., South Korea's third-largest carmaker, said May exports soared 53 percent to 93,491 units, taking total sales to 103,222, up 48 percent.
Its domestic sales rose 12.3 percent to 9,731 units.
GM, the world's largest auto maker, took a majority stake in some Daewoo Motor assets in 2002, creating the unlisted GM Daewoo.
The launch of the large SM7 and the SM5 sedan helped Renault Samsung Motors Inc., the South Korean unit of Renault SA, recover from a long sales slump. Its May sales soared 60 percent to 9,678 units.