"Huge losses for the country's car industry look inevitable," said Ji Sung-chul, analyst at LG Economic Research Institute. "What makes things worse is that there are no hopes for recovery in the near future."

Analysts said the country's largest carmaker Hyundai Motor Co Ltd was believed to have incurred a loss of about 100 billion won ($75 million) in the six-month period, against a profit of 28.2 billion won a year earlier.

They estimated Hyundai's vehicle sales at about four trillion won for the January to June period, compared with 5.4 trillion won a year before.

"We've never seen such dismal sales before," said Hyundai Motor spokesman Min Kyung-hwan. "The overall economic depression has soured the appetite for durable goods such as cars."

Hyundai's vehicle sales in the first half totalled 446,573units, down from 598,012 units a year ago, with exports rising slightly to 298,446 units from 281,583 units.

For the whole of this year, analysts said Hyundai's loss would likely balloon to between 200 billion and 300 billion won if payments made to employees who quit the company under a restructuring scheme were considered.

"There will be at least about 200 billion won of severance and retirement payments this year. All that should go to losses," said Hur Kang, analyst at Hyundai Securities.

On June 29, Hyundai Motor filed a notification with the labour ministry to lay off 4,830 workers by the end of July.

Hyundai Motor earlier said it planned to cut its payroll by about 8,200, about 18 per cent of its total workforce, with about 3,400 workers having so far volunteered to quit.

Hyundai earned 46.5 billion won in net profits in calendar 1997 on sales of 11.7 trillion won.

Daewoo Motor Co Ltd, an unlisted unit of the Daewoo Group, said its domestic sales in the first half dropped nearly 50 percent, while exports rose only 4.1 per cent.

Daewoo Motor's sales for the first half were estimated at about 2.0 trillion won, compared with 2.5 trillion won for the same 1997 period, analysts said.

"A rise in export prices as a result of the won's fall against the dollar helped a lot to compensate for losses in domestic sales," said a Daewoo Motor spokesman.

Two other carmaking units of Daewoo Group, Daewoo Heavy Industries and Ssangyong Motor, were believed to have done no better than Daewoo Motor.

Daewoo Heavy suffered from a sharp fall in sales of commercial vehicles, but enjoyed a sales boom in mini cars. It launched a new mini car model Matiz earlier this year.

Ssangyong Motor also witnessed a sales slump despite the debut of its luxury chairman Sedans.

Kia Motors Corp would see its sales in monetary value drop more than 40 percent in the first half from 3.9 trillion won a year ago, analysts said.

Labour disputes on top of the overall economic slump were blamed for Kia's bleaksales.

Kia's Union walked out for more than two weeks in June to protest a delay in salary payments. Kia has cut its workers' salaries by 50 per cent since last July."

But Kia may report net profits for the first half, from anet loss of 40 billion won a year ago because interest payments on loans were frozen as the company was under receivership procedures," said Chang Choon-rin, analyst at Daewoo Economic Research Institute.

Kia and its sister firm Asia Motors Corp are both under court receivership after nearly collapsing last July. Creditors sought receivership for the automakers last October.

Kia used to pay about 430 billion won in interest annually on about 5.5 trillion won of debts, analysts said.

Japan's Mazda Motor Corp said on Friday that it is studying the possibility of jointly participating with Ford Motor Corp in international bidding for the failed Kia Motors Corporation.

On Monday Kia's main creditor bank said it would formally announce the opening of bids for Kia and Asia Motors onJuly 15, the report saidSouth Korea's Hyundai Motor Co and Daewoo Motor Co have said they would bid for Kia, probably in a joint manner.