Korea’s automobile exports hit a record high of USUS$70.9 billion in 2023.
Korea’s automobile exports increased 31.1 percent year on year to US$70.9 billion last year, according to 2023 annual automotive industry data released by the Ministry of Trade, Industry and Energy (MOTIE) on Jan. 16. This surpassed the previous record of US$54.1 billion set in 2022.
This is mainly due to the Korean automotive industry’s strategy of expanding exports of expensive eco-friendly vehicles in line with the global automotive market’s trend toward eco-friendliness and electrification. Last year, eco-friendly vehicle exports totaled about US$24.2 billion, up 51 percent from 2022.
The unit cost of exported automobiles also reached around US$23,000 for the first time. The previous record was US$21,000 set in 2022.
In December 2023, auto exports reached US$6.4 billion, marking the 18th consecutive month of year-over-year growth. Auto exports have remained above US$6 billion since November.
Korea’s automobile production grew 13 percent year on year to 4.24 million units as the supply of parts such as automotive semiconductors normalized, restoring annual production to 4 million units for the first time in five years since 4.03 million units in 2018. The rankings of production by models at domestic plants showed the Avante (270,000 units) in first place and the Kona (250,000 units) in second place, the Trailblazer (220,000 units) in third place, the Trex (210,000 units) in fourth place, the Sportage (210,000 units) in fifth place, and the Tucson (190,000 units) in sixth place. In particular, the increase in production was driven by an increase in automobile exports to address global pent-up demand due to COVID-19, with approximately 65 percent (2.77 million units) of domestically produced vehicles exported to overseas markets.
Domestic sales swelled 3 percent year on year to 1.74 million units, the first increase in three years since 1.89 million units in 2020. The domestic eco-friendly vehicle market saw a year-on-year increase of 45 percent in hybrid vehicles due to the effects of new models such as the Grandeur Hybrid.
“There were great concerns about a decline in Korea’s eco-friendly vehicle exports due to the implementation of the IRA, but through continuous discussions with the United States, commercial eco-friendly vehicles for rental and leasing services have been able to receive subsidies of up to US$7,500 since January 2023,” said an official at the Ministry of Trade, Industry and Energy. “The Korean automobile industry also actively expanded commercial vehicle sales, leading to a year-on-year increase of 70 percent in exports of eco-friendly vehicles to the United States under the IRA.”