Decline in Automobile Production and Domestic Sales in H1... Export Growth Led by Eco-Friendly Vehicles

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] In the first half of this year, both production and domestic sales in the automobile industry decreased. However, exports showed an increasing trend due to strong sales of eco-friendly vehicles and rising export unit prices.

According to the '2022 First Half and June Automobile Industry Trends (Provisional)' announced by the Ministry of Trade, Industry and Energy on the 15th, automobile industry production and domestic sales in the first half decreased by 2.0% and 11.3%, respectively, compared to the same period last year. Export volume increased by 1.5%, and export value also rose by 3.2%, according to provisional estimates.

Production was 1,779,044 units, down 2.0% year-on-year, amid ongoing supply shortages of vehicle semiconductors and intensified supply chain instability due to China's lockdown measures. Monthly production volume in the first half has continuously increased compared to the previous month since February, maintaining a top 5 global production country ranking through May. Although production volumes of major global OEMs mostly declined, Hyundai and Kia recorded a slight decrease due to restructuring of their supply chain management systems.

Domestic sales amounted to 807,605 units, down 11.3% year-on-year, due to continued delivery delays, weakening effects of new model launches, and base effects. Despite strong sales of eco-friendly vehicles (58.5%), domestic cars recorded a 10.8% decrease to 668,950 units sold, affected by parts supply shortages and shipment disruptions caused by the Cargo Solidarity Union's transport refusal.

Domestic sales have continuously increased since the first half of 2014, accounting for 26.1% of total automobile sales. This means that one out of every four new cars sold in the first half of this year was an eco-friendly vehicle. By model, the sales increase was driven by new models such as the Sportage HEV, Ioniq 5, EV6 released last year, and the Niro (SG2) launched this year.

Export volume was 173,061 units, down 5.7% year-on-year, and export value was $3.94 billion, down 2.7%, marking a negative turn in both volume and value for the first time in three months. The ongoing semiconductor supply shortage and intensified supply chain instability due to China's lockdown measures caused decreases in both automobile production and domestic sales in the first half. However, strong sales of eco-friendly vehicles and rising export unit prices led to a slight increase in export volume and value.

Automobile parts exports in the first half recorded $11.8 billion, up 1.7% year-on-year, despite supply chain disruptions caused by the Russia-Ukraine conflict, supported by strong finished vehicle sales.

Meanwhile, June automobile production increased by 0.8%, but domestic sales decreased by 11.9%, export volume by 5.7%, and export value by 2.7%, according to provisional estimates.

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