Automotive industry in South Korea - Statistics & Facts

Published by Won So, Apr 25, 2019
South Korea's automobile industry is now the fifth largest producer of passenger cars in the world. The automobile industry accounts for 13 percent of manufacturing output, generates 12 percent value added, and is a very important industrial area that contributes to about 12 percent of total employment in South Korea. It is a core industry that affects all industrial sectors, from materials such as steel, nonferrous metals and glass to transportation, advertising, financial services, and construction. For decades, the automobile industry has grown exponentially and has also been an indicator of the country's economic growth.

The South Korean automobile industry began with the first assembled car with a US military jeep-style car body and other parts in 1958. Shortly after, local companies in other industries entered the automobile industry and started technical cooperation with foreign companies. Foreign automotive companies could not conduct domestic business without joining local companies according to the government's automotive promotion policy. Since then, businesses worked to localize auto parts and develop a mass production system for exports. As a result, in 1986, Hyundai’s car model Excel (also known as Hyundai Pony) entered the US market. With 16 million units sold, it was the highest selling model in the United States at that time.

The leading manufacturer is home brand Hyundai Motor Company, with Kia motors (partly owned by Hyundai) coming in second. After Kia was merged to Hyundai during Asian financial crisis, the two companies have been working together to grow, resulting in their sales revenue steadily rising. The market share of Hyundai Motors Group recently took up over 80 percent of the total car manufacturing market in the country. While exports of vehicles have stayed relatively stable recently, the import value of vehicles has tripled compared to that of ten years ago. The share of imported cars in car registrations reached 15 percent, a threefold increase from three percent in 2005.

Currently, the automobile industry is undergoing big changes. The South Korean government aims to produce 6.3 million FCEVs and build 1,200 refueling stations across the country by 2040 to reduce greenhouse gas emissions and develop energy independence. In 2018, there were around 32 thousand FCEVs supplied in South Korea. Additionally, as of March 2018, around 6.4 million South Koreans were using car sharing systems. The leading car sharing company, Socar, started its business with only 100 cars in 2012 and is now running over ten thousand cars. Socar has been collaborating with Tesla, SK telecom, Naver, and other IT companies to develop a self-driving and car sharing system; a future-oriented move that looks to integrate emerging technologies with the automobile industry.

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Automotive industry in South Korea

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