Korean Cars Expand Global Market Share to 8.4% Despite COVID-19 Pandemic

[Asia Economy Reporter Suyeon Woo] Amid the sharp decline in global automobile market sales due to the impact of the novel coronavirus infection (COVID-19), the market share of Korean car brands expanded to 8.4% in the first quarter of this year, showing a relatively strong performance. While automobile factories worldwide came to a halt in the first quarter due to COVID-19, Korea maintained domestic factory operating rates through swift responses.

According to the Korea Automobile Manufacturers Association on the 29th, the global automobile market share of Korean car brands in the first quarter of 2020 was 8.4%, up 1.1 percentage points compared to the same period last year. The market shares of European and Chinese automakers declined, whereas those of American, Japanese, and Korean automakers increased.

The global market share of European automakers in the first quarter was 31.5%, down 0.3 percentage points from the previous year, while Chinese automakers dropped 3.5 percentage points to 11.4%. American brands’ share rose 1.7 percentage points to 19.9%, and Japanese brands increased 0.9 percentage points to 26.3%.

European and Chinese brands saw their market shares decline as their main markets, Europe and China, continued to suffer from COVID-19 throughout the first quarter. In contrast, American and Japanese automakers, whose main market is the U.S., were relatively less affected since the impact of COVID-19 in the U.S. began in late March.

Global automobile sales in the first quarter of this year plummeted 27.5% year-on-year to 11,205,000 units due to the direct impact of COVID-19. Among these, global sales of Korean car brands decreased by 15.9%, showing a relatively lower decline compared to the overall global market contraction.

[Image source=Yonhap News]

Meanwhile, to overcome the 'demand cliff' in the global automobile market, governments worldwide are rolling out various policies to support car sales. In the U.S., indirect support is provided by easing environmental regulations to reduce compliance costs. China is mobilizing all available policies, including extending subsidies, deferring regulatory enforcement, and offering tax reductions to stimulate domestic demand.

Europe has introduced a package support policy worth 5.4 billion euros and is expanding subsidies to maintain employment. Major European countries such as Germany, the UK, and France are expanding the implementation of short-time work allowance systems to help companies maintain employment during production cuts or shutdowns.

A representative from the Korea Automobile Manufacturers Association stated, "It is necessary to expand sales focusing on the domestic market, which is performing relatively well compared to overseas markets, and to extend reductions in automobile acquisition tax and individual consumption tax as well as broaden the scope of subsidy support to overcome the demand cliff in overseas markets in the second quarter."

They added, "Due to sales declines caused by COVID-19 damage, delays and reductions in R&D investment plans for future vehicles are inevitable. To prevent being overtaken by countries like China in future vehicle technology competitiveness, preparations must be made for restructuring the industrial landscape during the post-COVID-19 recovery phase."

This content was produced with the assistance of AI translation services.