South Korea's car exports reach record high as demand for EVs and SUVs drives strong growth

High-Value Models Boost Export Performance

According to data released by the South Korean Ministry of Trade, Industry and Energy on July 18, despite uncertainties in the global car market, Korea's automobile export value in June increased by 2.3% year-on-year, reaching $6.3 billion, setting a new record for June exports. Although the total export volume fell nearly 9% year-on-year, high-value-added models such as SUVs and electric vehicles were key factors driving the growth in export value.

The data shows that the total number of vehicles exported in the month was 244,427, a year-on-year decrease of 8.8%. The ministry stated that the Korean automotive industry is accelerating its structural transformation, moving from traditional models to new energy and high-end directions, with the increased average export price per vehicle initially showing positive results.

Exports to the U.S. Decline for Fourth Consecutive Month, Asia and Europe Step In

Affected by the U.S. government's 25% import tariff increase starting in April, Korean automobile exports to the U.S. suffered a fourth consecutive monthly decline. June exports to the U.S. amounted to $2.7 billion, down 16% year-on-year. This trend has caught the attention of the Korean side, who has consistently raised objections during multilateral trade negotiations.

However, the gap left by exports to the United States is being partially filled by the Asian and European markets. In June, automobile exports to EU countries increased by 32.6% year-on-year, reaching $770 million, while exports to Asian markets surged 35.6%, up to $620 million. Notably, markets in Germany and the Netherlands performed outstandingly, with exports to these two countries almost doubling, becoming important pillars supporting the overall export growth.

Promising Performance in the Middle East and Environmentally Friendly Models

Aside from traditional markets, the Middle East also demonstrated strong growth momentum, with June export value rising by 11.9% year-on-year to $520 million. The region's demand for large-displacement SUVs and pickup trucks is robust, becoming a new growth pole actively cultivated by Korean car manufacturers.

Meanwhile, sales of environmentally friendly models continue to climb both domestically and abroad. In June, sales of eco-friendly vehicles in Korea surpassed 72,000 units, a year-on-year increase of 36%. This figure not only reflects an improved consumer acceptance of new energy vehicles but also indicates initial success for the local automotive industry's transition towards electrification.

Domestic Sales Rebound, Production Capacity Remains Stable

In the domestic market, South Korea's local automobile sales in June totaled 145,843 units, an increase of 5.8% year-on-year, suggesting a moderate recovery in consumer confidence. The Korean Ministry of Industry pointed out that stable domestic demand provides positive support to the entire automotive industry, aiding companies in maintaining revenue performance amid unstable external demand.

Regarding production capacity, the total production of automobiles nationwide in June was 353,233 units, matching the figures from the same period last year, demonstrating that Korea's automotive manufacturing system maintains high resilience in terms of supply chain and operations.

Diversified Market Strategy Becomes Key

Amidst uncertainties in global trade policies, the Korean automotive industry is gradually strengthening its diversified market strategy to reduce reliance on a single export country. As U.S. tariff policies remain unchanged, markets in Europe, Asia, and the Middle East will continue to play the role of "buffer zones."

In addition, with the accelerating trend towards electrification, the proportion of environmentally friendly models will continue to expand, becoming a new engine for future export growth. Relevant analyses suggest that if the current pace of structural transformation continues, the Korean automotive industry is likely to maintain a leading position in the global competitive landscape and enhance its resilience to geopolitical economic shocks.

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