Automotive Report South Korea 3rd Quarter 2018

Automotive Report South Korea 3rd Quarter 2018

  • July 2018 •
  • Report ID: 1698669 •
  • Format: PDF


  • South Korea is the world's sixth-largest producer of motor vehicles, behind China, the US, Japan, Germany and India, according to the International Organisation of Motor Vehicle Manufacturers (OICA). However, output, which peaked at 4.6m units in 2011, had fallen to 4.1m units by 2017, reflecting slowing demand for South Korean vehicles at home and abroad. The Economist Intelligence Unit expects production to fall further given the May 2018 closure of a plant by GM Korea, the local arm of General Motors (US).
  • Motor vehicle manufacturing is heavily supported by the government. In February 2017 the Ministry of Trade, Industry and Energy (MOTIE) released an industrial policy to invest over W35trn (US$31.5bn) up to 2022 in autonomous cars, electric vehicles and related technology and infrastructure. In a June 2018 update, the MOTIE outlined plans to invest W25bn (US$22.5m) in research and development for auto parts makers, as well as W2.6trn (US$2.3bn) to promote the adoption of hydrogen fuel cell vehicles.
  • On the demand side, ageing demographics, maturing domestic demand and lifestyle changes continue to drive a long-term slowdown in vehicle sales. Following slight declines in 2016-17, we project a moderate compound annual growth rate (CAGR) of 2.5% for new car registrations over the five-year forecast period (2018-22). The commercial vehicle (CV) market stagnated in 2016 and 2017 after three years of growth. We expect improving growth in 2018-22, with a CAGR of 1.9%.
  • South Korea's export-oriented automotive industry benefits from free-trade agreements (FTAs), but is vulnerable to trade pressure from China, the US and the EU. In May 2018 the US Department of Commerce launched an investigation to determine whether imports of automobiles threaten national security. This could signal more headwinds to South Korean car exports.






Loading...

We are very sorry, but an error occurred.
Please contact support@reportbuyer.com if the problem remains.