KAMA "Domestic Car Production Expected to Increase 4.4% YoY This Year... Impact of Export Recovery"

Despite challenges like the semiconductor supply shortage, efforts continue with no labor disputes
KAMA "Government needs to address reverse discrimination between domestic and imported cars"

[Asia Economy Reporter Yoo Je-hoon] It is forecasted that domestic automobile production in South Korea will increase by approximately 4.4% compared to the previous year. Although domestic sales are expected to slightly decline, the recovery of exports, which had been contracted due to the COVID-19 pandemic, is anticipated to offset this decrease.

According to the "2021 Revised Outlook and Implications for the Automobile Industry" report published by the Korea Automobile Manufacturers Association (KAMA) on the 13th, domestic automobile industry production this year is predicted to reach 3.66 million units, a 4.4% increase from the previous year.

Exports are expected to increase by 14.0% to 2.15 million units, influenced by the recovery of demand in overseas markets that had been contracted due to COVID-19. For domestic sales, imported cars are projected to increase by 9.1% to 330,000 units, while domestic cars are expected to decrease by 5.8% to 1.51 million units, resulting in an overall decline of 3.5% to 1.84 million units.

Meanwhile, domestic automobile industry production up to July showed a 7.0% increase to 2.11 million units compared to the same period last year, driven by export growth. Exports recorded 1.24 million units, a 23.1% increase from the previous year’s same period, due to the base effect from last year’s sharp decline in overseas sales caused by COVID-19 and the recovery in demand.

Domestic sales, affected by a reverse base effect, decreased by 3.2% to 1.06 million units. Domestic cars declined by 6.8% to 870,000 units, while imported cars increased by 18.2% to 190,000 units, showing a widening gap in growth rates between domestic and imported cars.

Jung Man-ki, Chairman of KAMA, stated, "The domestic automobile industry is facing difficult circumstances such as the prolonged COVID-19 pandemic and semiconductor supply instability, but joint efforts to overcome the crisis continue, including the successful labor-management negotiations of five major automakers." He added, "The government also needs to improve conditions so that domestic automakers can compete on equal footing with imported cars by applying the same timing for individual consumption tax imposition on domestic and imported cars and addressing reverse discrimination related to the entry of automakers into the used car sales business."

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