Minicars, once rumored to be headed for discontinuation, are making a comeback. High prices and high interest rates have raised the burden of buying and maintaining vehicles, driving more consumers toward budget-friendly cars.
Recession-Era Consumption Brings Minicars Back: Morning Races Ahead
Domestic sales of Hyundai Motor's Casper and Kia's Morning and Ray totaled 44,641 units in the first half of this year, according to Hyundai Motor and Kia on Thursday. The figure is up 11.5 percent from 40,030 units during the same period last year.
June sales continued the upward trend. Combined sales of the Casper, Morning and Ray reached 7,563 units last month, up 13.4 percent from 6,669 units a year earlier.
The most notable model was the Morning, which introduced a model-year update in May. First-half sales of the Morning reached 11,995 units, a surge of 82.1 percent from the same period last year. June sales came to 1,919 units, up 59.4 percent from a year earlier.
The Casper also sold 8,266 units in the first half, up 1.1 percent year-on-year, and 1,485 units in June, growth of 23.2 percent.
The Ray sold 24,380 units in the first half, down 3.5 percent from last year, but still recorded the highest sales among minicars, leading the market.
The industry attributes the trend to rising new-car prices, high interest rates and high fuel costs, along with growing burdens from insurance premiums and maintenance costs, prompting more consumers to choose minicars with relatively lower purchase and maintenance costs. Analysts say the sharp rise in sales of the Morning, the cheapest model, in particular reflects this consumer sentiment.
Large Cars Slow: Full Recovery of Minicar Market Not Yet
The rebound in minicars contrasts with sales of large vehicles.
Kia's Carnival sold 30,202 units in the first half of this year, down 28.9 percent from the same period last year, while Hyundai Motor's Palisade fell 36.1 percent to 19,667 units. While the market trend centered on SUVs and eco-friendly vehicles continues, analysts interpret that some consumers are turning back to value-oriented vehicles amid the economic slowdown.
Still, some say the minicar market has not recovered to past levels. Domestic minicar sales peaked at more than 200,000 units annually in 2012, but have steadily declined since, recently falling short of 100,000 units a year.
Sales of the three Hyundai Motor and Kia minicars also declined about 24 percent, from 52,695 units in the first half of 2024 to 40,030 units last year, before rebounding 11.5 percent this year, though they have yet to reach 2024 levels.
The industry expects that the minicar market, shrunk by a shortage of new models, production disruptions and the popularity of small SUVs, will not easily recover its former size in the short term. However, as long as high prices and an economic slowdown persist, interest in price-competitive minicars and small cars is likely to continue for the time being. One industry official told Newsis, "Separate from the expansion of demand for eco-friendly vehicles, a consumer segment seeking to reduce price burdens could steadily support minicar sales."
