Major Korean Car Exporters Shift from Europe to Asia... Sharp Increase in Unit Export Prices

Export Price Per Vehicle Surpasses $20,000 for the First Time
Increase in High-Priced Models Such as SUVs and Eco-Friendly Cars
Previously, Export Prices Were Higher in Europe and North America
Export Prices Rise with More New Car Launches in Asia Region

At the Hyundai Motor factory in the Delta Mas industrial complex in Bekasi, Indonesia, a Kona Electric vehicle signed by Indonesian President Jokowi during his past visit to the Hyundai Ulsan plant is on display.

[Asia Economy Reporter Choi Dae-yeol] Among the regions that imported cars from South Korea last year, the region with the highest unit price per vehicle was Asia. Until just three or four years ago, the export unit prices were higher in the North American region, which preferred large vehicles, or the European region, which had relatively high demand for eco-friendly and luxury cars. However, as export volumes to Southeast Asia, including Indonesia and Singapore, increased, the unit price per vehicle also rose.

According to the automobile export status compiled by the Korea Automobile Manufacturers Association on the 1st, the unit export price of Korean cars last year was recorded at $20,359. This represents an increase of about 14% compared to the previous year, and it was the first time the unit export price exceeded $20,000. Compared to the export unit price five years ago in 2016, it rose by more than 40%.

The rise in the average export price of cars is due to an increase in the proportion of eco-friendly vehicles such as sports utility vehicles (SUVs), hybrids, and electric cars among major manufacturers. The export value of eco-friendly cars rose to the point where it accounted for one-third of the total automobile export value as of the fourth quarter of last year.

Finished vehicles waiting in the storage yard next to the export shipment dock at Hyundai Motor Company's Ulsan plant

What stands out is that the average export unit price by continent shows Asia at $24,357, significantly higher than other continents. In 2020, the average export unit price for Asia was $19,979, almost the same level as Europe ($19,844, including non-EU countries), but it surged by more than 20% in just one year, widening the gap.

Last year, the average export price in Europe was $22,182. North America was similar at $21,321. Export unit prices to Africa, Latin America, and the Middle East were relatively low, ranging from $14,000 to $16,000.

Asia has traditionally been a market where Korean manufacturers have struggled to gain a strong foothold. Hyundai Motor and Kia, which are responsible for a significant portion of domestic export volumes, as well as Korea GM and Renault Samsung, mainly export to North America or Europe. Even in China, where Hyundai and Kia have established local production systems, their market share has significantly decreased compared to the past.

President Joko Widodo and Hyundai Motor Group Chairman Chung Euisun stand side by side next to the Genesis electric vehicle G80 at the 'Future Electric Vehicle Ecosystem' event held last October at the Jakarta International Expo (JIExpo) in Indonesia.

In Southeast Asia, Japanese manufacturers such as Toyota have long focused on the market and established strong local production systems, securing a considerable market share. However, recently, Hyundai and Kia have been launching various new models centered on Southeast Asia, including relatively high-priced models such as electric vehicles and SUVs, and have been targeting the local market, which is believed to have driven up the export unit price.

In Indonesia, considered the largest complete vehicle market in ASEAN, the number of Korean cars imported (including buses and trucks) was 547 units in 2020, but last year it increased more than fivefold to 2,801 units. In Thailand, where Japanese manufacturers dominate the market, the import volume of Korean cars also rose significantly from 998 units to 3,793 units during the same period. Although the absolute number of Korean car imports in Japan, known as the graveyard of foreign brands, was small at 129 units, the increase compared to the previous year (19 units) was substantial.

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