Renault Samsung is struggling in South Korea. Photo courtesy of Renault Samsung
SEOUL, March 3 (UPI) -- Foreign-owned automakers in South Korea are losing market share to homegrown powerhouses Hyundai Motor and Kia.
The country's five leading carmakers announced Tuesday their domestic sales for last month, which amounted to slightly more than 100,000. Hyundai Motor and its sister firm Kia accounted for 88.5 percent.
Hyundai and Kia saw their February sales jump 32.6 percent and 31 percent from a year ago, respectively, while their foreign-owned competitors -- GM Korea, Renault Samsung and SsangYong Motor -- stayed stagnant or faltered.
SsangYong's sales declined 47.6 percent year-on-year. The company, owned by India's Mahindra & Mahindra, is facing an existential crisis due to mounting deficits.
Mahindra & Mahindra is trying to sell its majority stake in the debt-laden company, which filed for court receivership late last year. But the attempt has been unsuccessful.
Things aren't much better for GM Korea and Renault Samsung.
GM Korea has suffered from deficits for seven straight years since 2014. To deal with the difficulties, it reduced one of its factories to half capacity in February, but COVID-19 and labor strikes are plaguing the affiliate of General Motors.
In North America, GM has closed three plants until at least March due to a worldwide shortage of semiconductor chips.
Renault Samsung reported an operating loss of some $62 million last year as its overall sales plummeted 34.5 percent from 2019 due to the plunging exports.
French carmaker Renault has an 81 percent stake in the company.
"Last month, the automotive chip shortage affected the supply chain of carmakers in the domestic market, especially GM Korea," SK Investment & Securities analyst Kwon Soon-woo told UPI News Korea.
"Apart from the issue, however, concerns surfaced on whether foreign-owned carmakers in Korea will be able to stay alive as their performances have been disappointing," he said.
Kim Pil-soo, a professor of automotive studies at Daelim University, agreed.
"SsangYong is in real danger. GM Korea and Renault Samsung are also required to worry about their sustainability. Things are getting worse because they face labor strife in these difficult times," Kim said.
"As all the three companies are running factories in Korea, they will not leave the country overnight. But money-losing companies cannot roll out products forever," he said.
Union members at Renault Samsung threatened to go on a strike in February, while GM Korea workers staged partial strikes for two weeks late last year.