SOUTH KOREA'S AUTO OUTPUT FORECAST TO FALL 4.8PCT IN 2008

Fri. December 05, 2008; Posted: 12:50 AM

SEOUL, Dec 05, 2008 (AsiaPulse via COMTEX) -- KIMTY | Quote | Chart | News | PowerRating -- South Korea's vehicle output is expected to fall 4.8 per cent on-year this year on a global economic downturn and weaker domestic demand, in what would be the first annual decline since 2001, a trade association said Thursday.

The combined production of cars, trucks and buses by Hyundai Motor Co., (KSE:05380) Kia Motors Corp. (KSE:000270) and other local automakers is expected to total 3.89 million vehicles this year, compared with 4.08 million units last year, said an official at the Korea Automobile Manufacturers Association.

"The U.S.-sparked global economic slump is rapidly spilling over into the local auto industry," said Koo Hee-cheol, the KAMA official.

"Also, weak consumption and tight credit at home continue to weigh on the auto market," Koo said.

Previously, the KAMA had predicted the nation's vehicle output to grow to 4.2 million units this year.

It would be the first time the South Korean auto industry has faced a contraction since 2001, when vehicle output stood at 2.94 million units, Koo said.

Domestic sales are forecast to fall 2.4 per cent to 1.19 million units, and exports are likely to fall 5.2 per cent to 2.7 million vehicles, according to Koo.

In the first 11 months of this year, South Korea's auto output fell 4.5 per cent from a year earlier, to 3.57 million units, the industry group said in a statement earlier in the day.

Last month, the nation's auto production dropped 18.2 per cent from the same month to 328,178 units, it said.

To reduce rising inventories and cut costs, South Korean automakers, led by Hyundai Motor Co. and its affiliate Kia Motors Corp., are taking various steps by slashing daily work hours or idling their plants at home and overseas. (END)

(Yonhap)

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