A tectonic shift in the domestic automobile market… Hybrid car sales decline for the first time

Domestic hybrid car sales, which have continued to grow every year, turned to decline for the first time this year.

Along with the diagnosis that the domestic automobile market's center of gravity has begun to shift to electric vehicles, there is analysis that this is the result of a combination of production disruptions at Hyundai Motor Company and Kia Motors and the aging of flagship models.

According to the Korea Automobile Mobility Industry Association (KAMA) on the 13th, cumulative new registrations of domestic hybrid vehicles (including mild hybrids) in the third quarter of this year (January to September) amounted to 421,199 units, down 3.9% from the same period last year.

This year is the first time that hybrid vehicle sales (January to September) have decreased since 2013, when registration statistics by fuel were compiled. The proportion of all new car registrations also decreased by 0.4% to 34.1%.

Domestic hybrid vehicle sales from January to September were 22,181 units (1.9%) in 2013, 25,787 units (2.1%) in 2014, 28,438 units (2.1%) in 2015, 46,333 units (3.4%) in 2016, and 2017. It steadily increased to 60,892 units (4.3%), 62,083 units (4.5%) in 2018, and 73,165 units (5.6%) in 2019, and exceeded 100,000 units for the first time in 2020 (110,016 units, 7.7%).

In 2021, the proportion exceeded 10% for the first time with 174,347 units (13.1%), 203,212 units (16.3%) in 2022, 278,500 units (21.0%) in 2023, 355,404 units (29.4%) in 2024, Last year, it increased sharply every year to 438,170 units (34.5%).

Both supply and demand factors are cited as reasons for the decline in hybrid vehicle growth this year.

On the demand side, there is analysis that the domestic automobile pivot, which shifted from internal combustion engine vehicles to hybrid vehicles, is now beginning to shift to electric vehicles.

Hybrid vehicles, which have been attracting attention as a realistic alternative in the electric vehicle chasm (temporary stagnation in demand) in recent years, are losing their growth momentum along with the recovery in demand for electric vehicles.

In fact, from January to September this year, new domestic electric vehicle registrations surged 74.8% to 296,801 units. This is a notable increase that occurred at a time when sales of gasoline, diesel, and liquefied petroleum gas (LPG) vehicles, as well as hybrid vehicles, were decreasing at the same time.

Kia sold 104,370 electric vehicles, 112.3% more than last year, led by EV5, EV4, and PV5, and in the imported car market, Tesla sold 89,148 units, a 104.4% increase thanks to Model Y and Model 3.

The number of gasoline vehicles decreased by 19.4% to 386,533 units, giving up the top spot by fuel to hybrid vehicles. Electric cars ranked third, followed by LPG cars (91,965 units, 11.0%↓) and diesel cars (29,712 units, 58.6%↓).

On the supply side, disruptions in hybrid car production and model aging at Hyundai Motor Company and Kia Motors are cited.

Last March, the delivery of major vehicle models was delayed due to a fire at the parts company Safety Industry, and it was reported that a significant number of hybrid models were included in this.

In the case of Hyundai Motor Company, there is an analysis that consumers have postponed their purchases as the launch of new hybrid models of major car models such as Avante, Tucson, and Grandeur is concentrated in the second half of the year.

The industry analyzes that, excluding the Seltos, sales of Kia's flagship hybrid models such as Sorento, Sportage, and K8 have slowed as they become older than electric vehicles.

An industry insider predicted, "The slowdown in hybrid vehicle growth this year is the result of a combination of supply and demand factors. As local government electric vehicle subsidies run out in the fourth quarter and new cars such as the Genesis GV80 Hybrid are released, I think there will be a rebound at the end of the year."