Last Year, Both Automobile Production and Domestic Sales Declined... Exports Turned to Growth After 9 Years

Impact of COVID-19 and Car Semiconductor Shortage... Eco-friendly Vehicle Exports Hit Record High for 4 Consecutive Years

[Sejong=Asia Economy Reporter Kwon Haeyoung] Due to the prolonged impact of COVID-19 and the shortage of automotive semiconductors, both annual automobile industry production and domestic sales decreased last year. On the other hand, exports turned to an upward trend for the first time in nine years since 2012, increasing in both volume and value. Exports of eco-friendly vehicles set new records for the fourth consecutive year, emerging as a new growth engine.

According to the "December 2021 and Annual Automobile Industry Trends" announced by the Ministry of Trade, Industry and Energy on the 18th, automobile production last year was tentatively estimated at 3.46 million units, down 1.3% from the previous year.

An official from the ministry analyzed, "Despite the ongoing impact of COVID-19 and the compounded shortage of automotive semiconductors, production was maintained at the previous year's level," adding, "The country maintained its 5th place ranking in production among major countries last year as well, demonstrating solid performance under various adverse conditions."

In fact, although production decreased for most global major Original Equipment Manufacturer (OEM) companies, Hyundai and Kia increased production by 5.3% through supply chain management and efforts to minimize production disruptions. During the same period, Volkswagen decreased by 6.4%, Renault-Nissan by 1.4%, General Motors (GM) by 8.2%, Honda by 6.7%, and Ford by 3.7%.

Domestic sales were recorded at 1.73 million units, down 8.5% from the previous year. This decline was due to the base effect following record-high sales the previous year and production disruptions caused by the semiconductor shortage. Domestic cars saw a 10.4% decrease to 1.429 million units due to delivery backlogs, while imported cars increased by 2% to 297,000 units, supported by expanded sales of German brands. The top five best-selling cars were all domestic models: Grandeur, Carnival, Avante, Sorento, and Sonata. By fuel type, internal combustion engine vehicle sales decreased by 17%, while eco-friendly vehicle sales increased by 54.5%.

Export volume increased by 8.6% to 2.05 million units, and export value rose by 24.2% to $46.47 billion, marking an upward trend in both volume and value for the first time in nine years since 2012. This was supported by the base effect from COVID-19 and an increase in domestic brand market share in the global market (from 8% to 8.4%).

In particular, hybrid vehicle exports increased by 71% compared to the previous year, driving overall automobile exports. The increase in the proportion of eco-friendly vehicle exports led to the sophistication of export items, resulting in the highest export value since 2014 ($48.4 billion). Compared to 2019, before the COVID-19 outbreak, this represents an 8% increase. Most regions also showed double-digit growth rates.

For eco-friendly vehicles, domestic sales increased by 54.5% to 348,000 units, and exports rose by 50% to 407,000 units, achieving record highs in both domestic and export markets. Domestically, eco-friendly vehicles accounted for 20.1% of total automobile sales, and electric and hydrogen vehicles surpassed 100,000 units for the first time, reaching 105,000 units sold. In the global electric vehicle market, Korea's sales ranking rose one spot to 7th place, and in the hydrogen vehicle market, Korea maintained the number one sales ranking for three consecutive years since 2019.

Automotive parts exports increased by 22.2% to $22.78 billion despite the semiconductor shortage, achieving positive growth for the first time in seven years due to strong global automobile sales.

Meanwhile, in December last year, domestic automobile production increased by 7.5% year-on-year to 319,071 units, domestic sales decreased by 6.2% to 153,742 units, and exports increased by 9.8% (export value up 17.3%) to 191,817 units.

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