small cars-sales decline

SEOUL, March 25 (Yonhap) -- Sales of small cars in South Korea sank in the first two months of the year due to weak demand stemming from the country's protracted economic slump, industry data showed Monday.

According to the data, a total of 28,711 small cars with engine capacities of 1.0 liter were sold in the country in the January-February period, down 8.2 percent from a year earlier.

The overall domestic passenger car market, however, shrank at a lower rate of 2.8 percent during the cited period, the data showed, indicating that low-income earners' purchasing power fell by a wider margin.

Demand for small cars had remained high in the country for their fuel efficiency and driving convenience.

Last year, a total of 202,854 small cars were sold in South Korea amid high fuel costs with Kia Motors Corp.'s Ray, released in late November 2011, leading the overall growth.

There are currently three small so-called city car models in South Korea -- the Chevrolet Spark made by GM Korea Co., and the Morning and the Ray produced by Kia Motors.

"If the current trend continues, this year's sales of small cars will be less than 200,000 units," said an official at Kia Motors.

On the other hand, sales of sport utility vehicles surged this year with a total of 37,425 units sold in the first two months of the year, up 18.5 percent, the data showed.

Market watchers said the economic slowdown may further sap demand for small cars that are cheaper to buy and operate, but high fuel costs may prevent a sharp drop in sales of small cars here.

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