KGM sells 8,188 units in May, down 10% on year

Domestic sales 3,318 units; exports 4,840; CKD 30

Total sales down 14% on month, 10% on year

Jan.–May cumulative total 44,777 units, up 1.7% on year

KGM sold a combined 8,188 units in May, as a contraction in export volume dragged overall performance lower both on the month and on the year, even as domestic sales held relatively steady.

The company disclosed Monday that it sold 3,318 units domestically, 4,840 units through exports and 30 units as completely knocked-down (CKD) kits in May, for a total of 8,188 units.

Total sales fell 13.9 percent from 9,512 units the previous month and were down 10.0 percent from 9,100 units in May last year.

Domestic sales of 3,318 units edged down 1.9 percent from 3,382 units the prior month and were 6.8 percent below the 3,560 units sold in the same month last year. Monthly domestic sales remained relatively stable, declining only marginally.

Export volume of 4,840 units fell 18.5 percent from 5,940 units the previous month and was 9.7 percent below the 5,360 units shipped in the same month last year. The overall May decline was driven more by the pullback in exports than by any softness in domestic demand.

Combined domestic and export vehicle sales came to 8,158 units, down 12.5 percent from 9,322 units the prior month and 8.5 percent below the 8,920 units recorded in the same month last year. CKD sales of 30 units fell 84.2 percent from 190 units the previous month and 83.3 percent from 180 units in the year-earlier period.

On a cumulative basis, however, KGM has maintained year-on-year growth. Sales for the January–May period totaled 44,777 units, up 1.7 percent from 44,041 units in the same period last year.

Cumulative domestic sales reached 18,169 units, up 18.8 percent from 15,290 units a year earlier. Exports over the same period fell 7.6 percent to 25,743 units from 27,861 units, with the domestic gains partially offsetting the export decline.

Cumulative vehicle sales stood at 43,912 units, up 1.8 percent on the year, while cumulative CKD sales of 865 units were down 2.8 percent.

Industry observers attribute the year-to-date export weakness largely to sluggish sales in Eastern Europe, where intensifying competition from Chinese electric vehicle makers, weaker demand for internal combustion engine and volume models amid elevated fuel prices, and a fading pull-forward effect from shipments accelerated in the second half of last year have all weighed on performance.

Despite the volume decline, KGM is expected to sustain improving profitability, as a stronger euro has lifted the won-euro exchange rate and rising average selling prices are seen pushing overseas sales above year-earlier levels. On the CKD front, revenue recognition for the Saudi Arabia project may be pushed back to the third quarter or later due to scheduling adjustments by the local state-run enterprise involved.

kwater@heraldcorp.com