Vehicle production South Korea 2012-2021, by type
Automobile production trends
South Korea's automobile production has been in decline for the past few years, with total annual production just above 3.5 million vehicles in 2018. This was lower than Mexico's production figures, with the result that Mexico overtook Korea as the 6th-ranking automobile producing country in the world. In contrast, in 2012, Korea was the 5th-ranking in the world and the number of passenger vehicles produced alone surpassed four million.
What is causing the decline in production?
One cause for the declining production figures could be the stagnant demand for passenger vehicles. While the production of commercial vehicles has by and large remained stable, passenger vehicle production fell from almost 4.2 million in 2012 to under 3.7 million in 2018; the difference is over 500 thousand automobiles.
The decision by GM Korea, the Korean subsidiary of the American General Motors, to shut down its Gunsan plant has also negatively impacted domestic production. GM Korea has long suffered financially and fell into capital impairment in late 2017. Furthermore, labor disputes, such as the long-running strikes by Renault Samsung's labor union, are worsening the situation. For example, the strikes and resulting production delays have also led Japan's Nissan to reduce its order of 100,000 cars placed on Renault Samsung's plant to just 60,000.