(Source = Korea Automobile Industry Association, Korea Imported Automobile Association, Korea International Trade Association)
Last year, automobile exports and production fell by double digits, recording a decline for the fourth consecutive year. However, the individual consumption tax cut led to a 5.8% increase in domestic demand. Japanese cars fell 43.9% compared to the previous year.
The Ministry of Trade, Industry and Energy announced on the 14th that last year, automobile exports decreased by 21.4%, production decreased by 11.2%, and domestic demand increased by 5.8%.
Exports plunged 33.9% in the first half, but the decline slowed to 8.1% in the second half, and the number of exports per year was 1.89 million units. Exports fell 13.0% to $37.73 billion. By vehicle type, the overall decrease, but the proportion of sports utility vehicle (SUV) exports rose 7.9 percentage points (P) from the previous year to 71.8%. Due to this effect, the export unit price per 10,000 automobile exports rose 10.4% from 180 million dollars to 200 million dollars.
The annual automobile production was only 3.15 million units. Due to a decline in exports and a contraction in sales due to Corona 19, some factories, such as Kia Sohari, were closed, lowering production. In February of last year, when a Chinese company stopped producing wiring harnesses (wire bundles), which are key parts of automobiles, production disruptions of about 900 units also affected.
Car production has remained at 3 million for the second year in a row following 2019, which recorded 3.95 million units in the aftermath of the finished car strike.
However, the increase in domestic demand due to the cut in the opening tax offset some of the decrease in production. Domestic sales increased by 5.8% to 1.89 million units, a record high in sales due to a cut in opening tax and various new car launches. Domestic sales in major countries such as the United States, China, and Japan have all declined, but only Korea has increased.
As for domestic cars, as Palisade, Sorento, and Tucson were popular, recreational vehicles (RV) accounted for more than half (52.3%) of the sales of passenger cars. As for Imports, 290,000 units were sold, an increase of 9.8% compared to the previous year as American, German, and Swedish brands showed good performance. Japanese cars plunged 43.9% in the aftermath of the boycott.
As production in major countries declined further, the country’s production ranking rose from 7th to 5th. Among the world’s top 10 producers, China (-3.0%) had the lowest rate of decline, followed by Korea. The US had a Kim So-Rating rate of -20.8%, Japan -17.5%, Germany -28.2%, Mexico -23.5%, and India -33.4%.
▲ Status of eco-friendly car exports by year. (Unit: units, %) (Data = Korea Automobile Industry Association, Korea Imported Automobile Association, Korea International Trade Association)
Even in the face of declining exports and production, the growth of eco-friendly cars is encouraging.
Domestic demand for eco-friendly cars increased 58.7%, selling 227,000 units, and exports increased 6.8% to 276,000 units. Both domestic demand and export are all-time highs. The proportion of eco-friendly cars in all domestic sales exceeded 10% for the first time in history.