Seoul [South Korea], December 3 (ANI): South Korea’s car exports are projected to decline this year for the first time in five years, as per a report by Pulse, the English service of Maeil Business News Korea.
According to industry sources on Wednesday, the Korea Automobile & Mobility Industry Association estimates annual car exports at around 2.71-2.72 million units, down about 2.3 to 2.6 per cent from last year’s 2.782 million units.
From January to October, Korea shipped 2.254 million vehicles overseas.
KAMA forecasts that roughly 230,000 units will be shipped overseas in the remaining two months.
This would mark the first drop in annual car exports since 2020, when the Covid-19 pandemic began. Exports had increased each year since, rising from approximately 1.89 million units in 2020 to 2.05 million in 2021, 2.3 million in 2022, and 2.77 million in 2023.
In value terms, exports are expected to reach an all-time high of $66.04 billion for January-November.
The decline is largely due to weak demand from the United States, Korea’s largest car market.
From January to October, exports to the US totalled 1.107 million units, accounting for 49.1 per cent of the entire exports, down 7.9 per cent from the same period last year.
Exports to the European Union during the same period stood at 316,351 units, up 7.7 per cent; to Latin America, 107,542 units, up 13.6 per cent; and to Africa, 29,110 units, up 25.5 per cent.
The decline in U.S. exports is linked to Hyundai Motor Group’s local production.
In March, the conglomerate opened its third US plant, Hyundai Motor Group Meta Plant America, and shipped 53,194 units from the facility by October. Hyundai plans to increase the plant’s annual capacity from 300,000 to 500,000 units.
Industry analysts warn that prolonged US protectionist policies could further pressure exports next year.
Under the Korea-US tariff and trade agreement, tariffs on Korean cars fell from 25 per cent to 15 per cent, but costs remain higher than the previous duty-free environment.
If Hyundai Motor Co. and Kia Corp. raise U.S. prices to protect profits, demand for exports could weaken further, insiders noted.
“This year, Hyundai accepted lower operating profits, which helped minimise the drop in export volumes,” said an industry official. “Next year, part of the tariff burden will inevitably be passed on to consumers, making US export volumes more volatile.”
Slowing demand in the U.S. could add to the challenges.
According to British market research firm GlobalData, US passenger and light commercial vehicle sales are projected to fall 0.7 per cent next year to 15.06 million units. (ANI)
