Seoul [South Korea], December 3 (ANI): South Korea’s car exports are expected to drop this year for the first time in five years, according to a report by Pulse, the English service of Maeil Business News Korea.
Industry sources on Wednesday cited the Korea Automobile & Mobility Industry Association (KAMA), which estimates annual car exports at around 2.71–2.72 million units, down 2.3–2.6 per cent from last year’s 2.782 million units. From January to October, South Korea shipped 2.254 million vehicles overseas, with roughly 230,000 units projected for the remaining two months.
This would mark the first decline in annual car exports since 2020, when the COVID-19 pandemic began. Exports had steadily increased each year from 1.89 million units in 2020 to 2.77 million in 2023. In value terms, exports are expected to reach a record $66.04 billion for January–November 2025.
The decline is primarily attributed to weak demand from the United States, South Korea’s largest car market. From January to October, exports to the US totaled 1.107 million units, accounting for 49.1 per cent of total exports, down 7.9 per cent from the same period last year. Exports to the European Union rose 7.7 per cent to 316,351 units, Latin America increased 13.6 per cent to 107,542 units, and Africa saw a 25.5 per cent rise to 29,110 units.
The reduction in US 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, shipping 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 caution that prolonged US protectionist policies could further pressure South Korean 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. Hyundai and Kia may raise US prices to protect profits, potentially weakening export demand.
An industry official noted, “This year, Hyundai accepted lower operating profits, which helped minimise the drop in export volumes. Next year, part of the tariff burden will inevitably be passed on to consumers, making US export volumes more volatile.” Slowing US demand may exacerbate challenges, with British market research firm GlobalData projecting a 0.7 per cent decline in US passenger and light commercial vehicle sales next year to 15.06 million units. (ANI)
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