[Car Talk Forest] South Korea's 'Car Boom' Unstoppable Even by COVID-19

Domestic Sales of Korean Cars Surpass 1.9 Million Units for the First Time

On the 21st, one day before the Chuseok holiday, export vehicles are waiting to be loaded at Pyeongtaek Port in Gyeonggi Province. (Aerial photography cooperation = Seoul Metropolitan Police Agency Aviation Unit Chief Lieutenant Colonel Lee Sang-yeol, Pilot Lieutenant Kim Doo-soo, Crew Lieutenant Kwak Sung-ho, Sergeant Park Sang-jin) / Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Yu Je-hoon] "Since last year, driving license academies have been bustling. Many people come to get a new license, and many others come for training. Especially, weekend driving training preferred by office workers is so popular that it's hard to find available time slots."

South Korea is experiencing an unexpected 'car boom.' This is happening amid the global COVID-19 pandemic. Even I, who had an 'inactive license' for eight years, have started practicing driving from the new year. Industry insiders attribute this mainly to the spread of non-face-to-face culture and retaliatory consumer sentiment. Since COVID-19 is still ongoing, it seems that the car boom in our country will continue for some time.

The most symbolic indicator of the car boom is the number of new car registrations. According to the Korea Automobile Manufacturers Association (KAMA), last year, domestic new car registrations reached 1,905,972 units, breaking the 1.9 million mark for the first time ever. South Korea's ranking in the global domestic car market jumped from 12th to 9th. Among the top 10 countries, South Korea is the 'only' one where domestic sales increased. Notably, individual demand rose by 9.2% last year, nearly double the increase in corporate and business purchases (5.2%). This statistic shows that general consumers are leading the car boom.

What is the cause of this sudden car boom? Primarily, it is attributed to the spread of 'non-face-to-face (untact)' culture due to COVID-19. Consumers, worried about infection risks when using public transportation amid the pandemic, tend to prefer their own vehicles. The instructor helping me escape my inactive license mentioned, "Since COVID-19, many people have been learning to drive for commuting and for taking their children to and from school."

However, explaining the car boom solely by non-face-to-face culture seems insufficient. If this culture were the main cause, sales of practical and compact cars suitable for commuting would naturally increase, but that has not been the case.

Therefore, some experts interpret that retaliatory consumption has appeared in the automobile market. Retaliatory consumption refers to satisfying suppressed consumer desires through the purchase of luxury or indulgent goods. Indeed, our daily lives have changed 180 degrees since COVID-19.

Supporting this, sales of high-end imported cars have also increased noticeably. According to the Korea Imported Automobile Dealers Association (KAIDA), last year, sales of imported cars priced over 100 million won reached 43,158 units, a 48.8% increase compared to the previous year (2019), before the COVID-19 outbreak. The average selling price of newly registered cars in the domestic market also showed a clear upward trend. Last year, the average selling price of newly registered cars was 35.9 million won, a 9.2% increase from the previous year.

Will the car boom continue this year? The industry expects the domestic market to shrink somewhat due to the base effect from last year. However, the new trends of premiumization and retaliatory consumption are expected to continue. Just last month, Hyundai Motor Group's premium brand Genesis saw sales increase by 283% compared to the same month last year. New registrations of imported cars also set a record high for January.

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