Exports Drop for 5th Consecutive Month
Korean automobile exports fell by a double-digit figure in July as the COVID-19 impact continued. Production decline slowed down as domestic demand for vehicles grew for the fifth straight month in July. Of note is that exports of electric vehicles doubled.
According to the Ministry of Trade, Industry and Energy (MOTIE), auto production and exports fell 3.8 percent and 11.7 percent on year, respectively. Domestic demand rose 8.9 percent.
The spread of the novel coronavirus continued to affect car production and exports. In July, auto production fell 3.8 percent on year to 345,711 units. The decline is the lowest since the beginning of the COVID-19 crisis. Production fell 22.2 percent in April (82,000 units), 36.9 percent in May (135,000 units), and 10.7 percent in June (36,000 units).
Domestic demand offset sluggish exports. Domestic sales rose 8.9 percent to 164,539 units in July due to new model launch effects and strong sales of popular models. Domestic sales were on the rise for five months, rising 10.1 percent in March, 8.0 percent in April, 9.7 percent in May and 42.0 percent in June.
Production by Hyundai Motor and Kia Motors slid 0.1 percent and 7.6 percent, respectively, to 163,585 units and 123,795 units. Ssangyong posted 7,837 units in sales, a year-on-year drop of 29.8 percent. Renault Samsung’s sales dipped 17.7 percent to 13,856 units.
In particular, domestically produced cars enjoyed strong sales. Their sales increased 10.5 percent to 143,038 units thanks to special discounts, low-interest installment programs and tax breaks as well as the effects of new model launches.
Imported cars sold 21,501 units in July, down 0.7 percent. Japanese brands fell 39.6 percent, decreasing the drop from 67.8 percent in March.
Exports fell 11.7 percent to 181,362 units in July. Although the COVID-19 impact continued, major markets such as North America and Europe were showing signs of a recovery.
By region, exports to North America increased 20.1 percent to US$2.04 billion. Exports to the European Union (EU) touched US$693 million and Eastern Europe US$231 million, down 6.3 percent and 20.1 percent, respectively. Exports to the Middle East and Latin America fell 50.8 percent and 71.8 percent each to US$184 million and US$49 million.
Much attention is paid to the growth of exports of eco-friendly cars such as electric vehicles. Exports of eco-friendly cars rose 12.5 percent to 27,468 units. The proportion of their exports stood at 15.1 percent in July, up 3.2 percentage points from 11.9 percent a year earlier.
Domestic sales of green cars were on the rise for six consecutive months. In July, 17,360 units of eco-friendly cars were sold, up 39.3 percent from a year earlier. The ratio of eco-friendly cars to other cars was 12.0 percent, up 2.5 percentage points from 9.5 percent a year before. Hybrids accounted for 78 percent of domestic sales of eco-friendly cars. In particular, sales of domestic HEVs jumped 72.0 percent due to the effects of the launch of the new Sorento HEV and strong sales of the Grandeur HEVs.
Exports of eco-friendly cars rose 12.5 percent on year to 27,468 units. In July, 12,511 electric vehicles were exported, chalking up a 105.1 percent increase from the same month of 2019. Hydrogen car exports inflated 23.9 percent.
Exports of auto parts fell 27.7 percent to US$1.48 billion due to inventory exhaustion and adjustments of production by local carmakers. However, the decline slowed down compared to 66.7 percent in May and 45.1 percent in June.