Alternative for Rebounding
Eco-friendly cars such as electric vehicles (EVs) and hybrid electric vehicles (HEVs) have emerged as popular export models for Korean car manufacturers. Korean car exports have been shrinking due to intensifying competition among brands and a slowdown in global demand but Korea’s export of eco-friendly models have been showing rapid growth, with their exports increasing four-fold in a year.
According to the automobile industry and the Korea Automobile Manufacturers Association (KAMA) on July 1, eco-friendly car exports rocketed 365% year on year in the first half of this year. Exports of eco-friendly cars shot up to 80,830 units in the first half of this year from 18,643 units in the first half of last year.
By models, the Hyundai Ioniq's exports grew sharply. The Ioniq which has a diverse range of products including EVs and plug-in hybrid electric vehicles (PHEVs), exported only 78 units in the first half of last year, but in the first half of this year, 27,393 units were exported, By region, Korea recorded a big jump in EV exports to Europe and North America, where environmentally friendly regulations are tight and electric vehicle charging infrastructure is relatively well established.
On the other hand, total car exports slid. Exports in the first half of this year declined 1.0% year-on-year to 1,321,390 units, the lowest level in seven years since the first half of 2010.
The favorable export of environment-friendly cars is attributed to the rapid global expansion of demand for environment-friendly cars such as electric cars instead of existing internal combustion engine vehicles using gasoline and diesel. According to the International Energy Agency (IEA), the world market for electric vehicles (including plug-in hybrid EVs) swelled 59.52% year-on-year to about 2,010,000 units last year. Market researcher IHS predicts that the electric car market will balloon to nearly 7.7 million units in 2020, nearly four times the current level.
Along with an increase in consumer demand, governments of nations are actively promoting eco-friendly cars. Recently, the French and British governments have officially announced plans to ban the sale of gasoline and diesel vehicles by 2040. The Netherlands and Norway are also pushing for a ban on the sale of gasoline and diesel vehicles from 2025. An internal combustion engine phase-out trend is already strengthening as an established trend in the automobile market.
As a result, voices are being raised that the Korean automobile industry, which is currently suffering from sluggish sales at home and abroad due to intensifying competition, should speed up the development of various eco-friendly cars, such as electric vehicles, in order to make a rebound overseas.