Compact cars find their lane as buyers prioritize price, fuel efficiency over size

Domestic sales of compact cars rebounded in the first four months of this year after falling to a record low last year, as consumers grappling with high oil prices, inflation and interest rates increasingly turned to cheaper and more fuel-efficient vehicles.

New registrations of compact passenger cars reached 28,417 units between January and April, up 12.8 percent from 25,183 units during the same period last year, according to data from auto industry tracker Carisyou on Monday.

The recovery marks a notable turnaround from last year, when annual compact car sales plunged 24.8 percent compared to 2024, when the annual figures stood at just 74,600 units, the lowest level ever recorded.

Domestic compact car sales peaked at 204,150 units in 2012 before entering a prolonged decline. The market briefly regained momentum following the launches of models such as the Hyundai Casper in 2021 and the Kia Ray EV in 2023.

The latest turnaround comes from rising vehicle prices, higher interest rates and high oil prices stemming from instability in the Middle East. The combination results in increased ownership and maintenance costs, driving consumers back toward compact cars.

The trend was reflected in sales of individual compact car models, especially for models with the lowest purchase and maintenance costs amid the economic slowdown.

The Kia Ray led compact car sales between January and April with 17,311 units sold, followed by the Kia Morning with 7,977 units and the Hyundai Casper with 3,058 units. While sales of the Ray and Casper remained largely unchanged from a year earlier, sales of the Morning surged 59.9 percent on year. 

Growing demand from consumers in their 60s and corporate buyers, both of which are sensitive to ownership and maintenance costs, also supports that analysis.

Compact car purchases by consumers in their 60s and corporate buyers rose 26.8 percent and 18.9 percent on year, respectively, between January and April, according to the Korea Automobile & Mobility Association.

Self-employed workers and small business owners with tighter budgets appear to be choosing compact cars in large numbers for work and delivery purposes.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY KO SUK-HYUN [[email protected]]