SEOUL -- South Korean carmakers saw sales growth grind to a virtual halt in September as Hyundai and Kia were hit by strikes, but the industry should get back on track this month with robust overseas demand and new models to woo local buyers.
Steadier steel costs and a stronger dollar should also help Hyundai Motor Co. and Kia Motors Corp. during the rest of the year, analysts said.
Hyundai's 42,500-strong labor union went on strike for several hours a day between Aug. 25 and Sept. 8 to press their case during wage negotiations, delaying production of popular models such as the Grandeur and Sonata sedans.
There were similar stoppages at Kia, a Hyundai affiliate, between Aug. 29 and Sept. 12.
"The strikes hit sales directly this time because inventory levels were lower than in previous years," Park Young-ho, an analyst at Mirae Asset Securities Co., said on Tuesday.
"Carmakers are expected to recover in the fourth quarter as demand for new models is firm. Pressure from high steel prices is also easing," he said.
The country's five carmakers exported 299,918 vehicles in September, up 4.5 percent on last year, but compared with 20 percent growth in August.
The car industry accounts for a tenth of South Korea's exports.
Domestic sales fell 9.4 percent to 82,303 units in September, compared with a 6.6 percent rise in August.
Total sales grew a meager 1.1 percent from last year to 382,221 vehicles, far slower than August's 17 percent growth and a 26 percent jump in July.
STRIKES DENT SALES
Hyundai, the world's seventh-largest carmaker, saw its sales drop 8.5 percent in September to 175,901 vehicles, with exports down 5.8 percent to 137,778 units and local sales falling 17.2 percent to 38,123 units.
"The strikes mostly hit local sales, but also affected exports as inventory was not sufficient for some popular models, such as the Sonata in the United States," Hyundai spokesman Park Sang-woo said.
Data released on Monday showed Hyundai's U.S. sales rose 9.1 percent in September from last year, but this still lagged Asian rivals such as Toyota Motor Corp. and Honda Motor Co. in the world's biggest auto market.
Kia's September sales fell 23 percent to 74,293 units, with exports down 24 percent from a year ago. The strike action dented sales of most of its models, including the Sportage SUV and Optima sedan.
Free from strike action, smaller local rivals enjoyed stronger sales.
Ssangyong Motor Co., owned by China's Shanghai Automotive Industry Corp., posted a 23 percent rise in September sales to 13,633 vehicles, with exports up 79 percent to a monthly record.
Third-ranked GM Daewoo Automotive and Technology Co. said its September sales jumped 52 percent to 107,479 units, with exports up by 58 percent.
Renault Samsung Motors Inc., the local unit of Renault SA, saw domestic sales jump 55 percent, helping boost overall sales by 49 percent. Renault Samsung offers just three passenger car models.