Ranking Shift in Car Production Due to COVID-19... Korea Jumps from 7th to 5th Place

[Asia Economy Reporter Kim Hyewon] While global automobile production declined by double digits last year, South Korea reclaimed its position as the 5th largest global producer for the first time in five years. This was thanks to South Korea's relatively strong performance amid production drops of over 20% in India and Mexico. The shift toward a high value-added industrial structure and cooperation between labor and management during the COVID-19 crisis were also credited as key factors.

According to a survey by the Korea Automobile Manufacturers Association (KAMA) on the top 10 automobile producing countries last year, South Korean automakers produced approximately 3.51 million vehicles, down 11.2% from the previous year. The production ranking rose two places from 7th in 2019 to 5th last year. This means South Korea regained the 5th position it had lost to India since 2016 after five years.

Global automobile production fell 15.5% last year, failing to reach 80 million units. In 2019, production had reached about 92.64 million units.

KAMA stated, "Since the statistics include some forecasts or estimates, the rankings by country may change once the final figures are confirmed."

All of the top 10 automobile producing countries saw production declines. However, there were no changes in the rankings of the top four producers. China maintained its top spot with a 2.0% decrease, followed by the United States (-19%), Japan (-16.7%), and Germany (-24.7%).

There were notable changes in rankings below 5th place. Although South Korea's production decreased by 11.2%, India (-24.9%) and Mexico (-21.2%) saw much larger drops, causing them to fall one rank each to 6th and 7th respectively.

Spain in 8th and Brazil in 9th experienced sharp declines of 19.6% and 31.6%, respectively. Russia, ranked 10th, decreased by only 15.7%, entering the top 10 for the first time since 2000. France, which was 10th in 2019, plummeted to 13th. Thailand and Canada took 11th and 12th places, respectively.

With changes in the top 10 producer rankings, global production shares also shifted. China and South Korea increased their shares by 4.4 percentage points and 0.2 percentage points, respectively.

China's rapid recovery from COVID-19 kept its production decline to just 2%, expanding its global production share significantly from 27.8% in 2019 to 32.2% last year. Production and sales of new energy vehicles also rose by 7.5% and 10.9%, respectively, enhancing China's influence in the future car industry.

South Korea's exports fell 21.4% to 1.89 million units due to COVID-19 impacts, but record-high domestic sales compensated for the export slump. Domestic sales of Korean cars increased by 4.7% to 1.61 million units. As a result, South Korea's global production share improved by 0.2 percentage points.

KAMA analyzed that South Korea's reclaiming of the 5th largest automobile producer position was mainly due to production disruptions in India and Mexico caused by COVID-19. However, factors such as labor-management cooperation at Hyundai Motor Company, rapid changes in the automobile industry structure focusing on high value-added vehicles like sport utility vehicles (SUVs), luxury cars (Genesis), and electric vehicles also played significant roles.

Jung Manki, Chairman of KAMA, stated, "Regaining the 5th place in production rankings amid difficulties is a great achievement, but considering changes such as China's rapid advancement, efforts toward smartization, premiumization, and electrification need to be further strengthened." He emphasized, "The government should continue to expand support policies such as bold regulatory reforms and research and development (R&D), and shareholders, management, and workers should accumulate cooperative experiences based on the recognition that they are one team."

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