The Korea Automobile Manufacturers Association announced on October 9 that a total of 258,026 vehicles were manufactured in South Korea last month, down 22.7% from a year ago, and the number reached the lowest level in 11 years.
This shrinkage can be attributed at least in part to strikes by workers in the automobile industry. According to the Ministry of Trade, Industry & Energy, the number of lost hours amounted to 100 in Hyundai Motor Company, 44 in Kia Motors and 12 in GM Korea, which resulted in a production loss of 79,000 vehicles and an export loss of US$1.14 billion.
Last month, Hyundai Motor Company’s production volume fell by 29.2% and those of Kia Motors, GM Korea and Renault Samsung Motors decreased by 26.1%, 7.4% and 6.5%, respectively. In contrast, Ssangyong Motors’ production volume increased by 4.5% with the popularity of its Tivoli on the rise in Europe. Their car production volume for the first nine months of this year totaled 3,031,093, down 10% from a year earlier, in South Korea.
In the meantime, their overseas production is continuing to increase. Specifically, the amount increased 12.4% year on year to 423,582 last month. The gap between their production volumes in and out of South Korea is widening as well. For the first three quarters of this year, for example, the number of cars they produced in the country was 290,752 less than Hyundai’s and Kia’s overseas production volume (3,321,845).
In the case of Hyundai Motor Company, the number of cars it produced in South Korea and sold abroad this year dropped by 18% from a year ago while that of those it produced and sold abroad rose by 5%. The figures fell 17.2% and increased 9.2% for Kia Motors during the same period. “South Korean automakers are increasingly resorting to overseas production due to the high labor costs and low productivity in the country,” said an industry source.