As low oil prices prolong, the markets for hybrid cars and compact cars are sharply contracting. In contrast, the sales of large sedans and SUVs continue on an upward trend. Since oil prices are low, consumers are placing more focus on performance and driving comfort rather than fuel efficiency, when purchasing cars.
To make things worse for car makers, an increasing number of foreign countries are strengthening environmental regulations. To cope with these regulations, car company have to undertake the difficulties in developing eco-friendly cars like hybrid and electric cars through massive investment.
According to KB Investment & Securities on February 11, the sales of domestically made hybrid cars in Korea totaled 2,274 units last month, down 27 percent from 2,900 units a year ago. After the termination of the individual excise tax benefits, overall car sales fell but hybrid cars suffered steeper decline in sales.
The sales of Hyundai Motor's Sonata Hybrid fell 57.3 percent to 536 units from 1,248 units during the same period, while Kia Motors' K7 plunged 73.2 percent.
