Will It See the Light Next Year? "2022 Global Car Market Expected to Grow 5.3%"

[Asia Economy Reporter Yu Je-hoon] The global finished car market is expected to grow by about 5% next year compared to this year. This is due to signs of resolution in the challenges that have constrained both demand and supply in the automotive sector, such as the COVID-19 pandemic and the shortage of automotive semiconductors.

According to the industry on the 26th, the Korea Automobile Manufacturers Association (KAMA) recently predicted at the 15th Industrial Development Forum hosted by the Korea Industrial Alliance Forum (KIAF) that the global automobile market size will increase by 5.3% from this year to approximately 88.65 million units next year.

Initially, the automobile market this year was expected to see a 'V'-shaped rebound as demand suppressed by COVID-19 recovered. However, due to the semiconductor shortage, the spread of the COVID-19 Delta variant, interest rate hikes and austerity policies in various countries, and inflation concerns, the growth rate is forecasted to reach only 3.8%, falling far short of the early-year forecast of 12.1%.

However, next year, it is anticipated that the semiconductor crisis will gradually be resolved, and recovery from the impact of COVID-19 along with the influx of pent-up demand will lead to a somewhat improved growth rate compared to this year. KAMA stated, "Until 2024, a relatively high growth rate in finished car sales is expected due to expectations for the end of COVID-19 and the increase in electric-powered vehicle sales."

In the domestic automotive industry, the domestic market is expected to expand by 0.3% compared to this year, reaching 1.74 million units. KAMA predicts that imported cars will decrease by 0.7% to 1.42 million units, while imported cars will increase by 4.9% to about 320,000 units. Additionally, exports are expected to increase by 6.3% to 2.18 million units.

In particular, the growth in the electric-powered vehicle sector is expected to accelerate further. Even this year, sales of eco-friendly vehicles, including mild hybrid cars, reached 13.09 million units, a 63% increase from the previous year. The sales share also rose by 5.7 percentage points from the previous year to 15.6%.

KAMA said, "Although growth in the finished car market is expected next year, negative external factors such as the ongoing US-China trade conflict, the spread of protectionism due to global supply chain restructuring, and China's rapid expansion into overseas markets also persist," adding, "Urgent measures include tax support related to research and development (R&D) and facility investment for future vehicles, expanding labor market flexibility to improve productivity, supporting parts suppliers to maintain the industrial ecosystem, and regulatory innovation in new industry sectors."

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