UPDATE 1-Hyundai Motor August sales dip due to holidays

* Hyundai sales at 6-month low as holidays hit demand

* Kia sales also dip from record high in July

* Hyundai closes up 1.8 pct, Kia up 3.6 pct on wage deal (Adds details)

SEOUL, Sept 1 (Reuters) - Hyundai Motor Co (005380.KS: Cotización) posted on Wednesday its poorest sales in six months, as demand weakened in the summer vacation period, but it fared better than smaller rivals after introducing an upgraded car in its domestic market.

South Korea's Hyundai, the world's No.5 automaker along with its affiliate Kia Motor Corp 000270.KS, said August sales rose 17 percent from a year earlier but fell 2.2 percent from July to 288,313 units, the lowest since February.

Its local sales inched up 0.6 percent after it unveiled a new, upgraded Elantra compact last month.

"Competition in the domestic market remains tough and we plan to further upgrade ageing models and boost marketing to revive weak domestic sales," Hyundai said in a statement.

Sales in overseas markets dropped 2.8 percent from July to 238,951 vehicles but rose 20 percent from a year ago, thanks to increased demand from China and the United States.

Hyundai said U.S. sales jumped more than 18 percent, helped by a new Sonata sedan, which accounted for nearly half of Hyundai's U.S. sales this year and helped it grow its market share there to a record 4.6 percent this year.