Korean Consumers' Preference for Domestic Cars Expands... EVs Not Yet Gaining Traction

Preference for Domestic Cars Surpasses 50%
EVs Still Face... "Concerns Over Battery Safety"

The proportion of domestic car consumers in Korea who prefer domestic vehicles has increased to more than half.

On March 18, Deloitte Korea announced the release of its "2026 Global Automotive Consumer Study" report, which contains these findings. The survey was conducted from October to November of last year, targeting 28,553 consumers worldwide.

According to the survey, 57% of Korean consumers said they would choose a domestic vehicle for their next car purchase, up 9 percentage points from 48% the previous year. The proportion of respondents who said they would switch brands for their next vehicle purchase was 55%, down from 63% the previous year. Given the overwhelming market share of domestic vehicles, the preference for domestic cars has become even stronger.

When it comes to criteria for choosing a brand, vehicle performance (54%) was cited as the most important factor, followed by ▲ vehicle durability (49%), and ▲ price competitiveness (43%). The report explained that consumers are increasingly focusing on actual product competitiveness and quality, rather than brand image, when selecting vehicles.

Positive View of SDVs... 'Recognizing Cars as Evolving Platforms'

According to the report, 57% of Korean consumers recognize the high utility of Software-Defined Vehicles (SDVs). This positive perception was highest in India (81%), Southeast Asia (71%), and China (68%), while it remained below 50% in the United States (41%), the United Kingdom (38%), Japan (33%), and Germany (33%), indicating a gap in perception among countries.

There was also a high willingness to accept Over-the-Air (OTA) software updates. 85% of Korean consumers said they would be willing to pay additional costs for OTA updates. 59% responded that they would keep their current vehicle longer if regular updates improved vehicle features and performance. In addition, consumers in Korea and globally showed a strong willingness to pay extra for connected services related to driving safety, such as automatic detection of vehicles and pedestrians, collision detection, and emergency assistance.

Internal Combustion Engine Vehicles Still Preferred... Continued Concerns Over EV Batteries

In the global automotive market, a preference for internal combustion engine vehicles is still evident. Korean consumers' preferences were concentrated on internal combustion engine vehicles (41%) and hybrid electric vehicles (HEVs, 27%), while the preference for battery electric vehicles (BEVs) remained at 11%.

The main reason Korean consumers consider purchasing electric vehicles is to reduce fuel costs (55%). This was followed by concerns over environmental damage (35%) and lower maintenance and management costs (34%).

By country, environmental concerns and policy factors were relatively more influential in Germany and the United Kingdom, whereas in China, India, and Southeast Asia, consumers tended to prioritize practical and experiential values, such as charging infrastructure and lifestyle experiences.

Globally, the main concerns regarding electric vehicles are charging time, driving range, and battery cost, in that order. In contrast, Korean consumers are most concerned about the safety of battery technology (50%). Other major factors included decreased driving performance in cold weather (39%) and charging time required (38%).

The report projected that the competitiveness of original equipment manufacturers (OEMs) will be determined not only by simple electrification technologies, but by their ability to operate a mobility ecosystem that integrates trust, software, and services. To secure a competitive edge, the report suggested the need to ▲ advance multi-powertrain strategies that consider regional differences in EV demand, ▲ build trust-based data and connectivity strategies, and ▲ strengthen SDV strategies that can provide continuous value.

The full report can be found on the Deloitte Korea website and the Deloitte Insights application (app).

Taehwan Kim, Automotive Industry Leader (Executive Director) of Deloitte Korea, stated, "The global automotive industry is undergoing structural changes, such as differentiated speeds of the electrification transition, reorganization of brand loyalty, trust issues in connected data, and the spread of SDVs," adding, "We hope this report will help companies examine key challenges such as software-based revenue models, quality, and service with a focus on consumer needs, and consider future strategies."

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