South Korea ranked seventh in global vehicle production in 2024, slipping one position from the previous year due to declining output amid an economic downturn, according to the Korea Automobile & Mobility Association (KAMA).
Domestic car production fell to 4.13 million units from 4.24 million in 2023 as local demand weakened. High inflation and rising interest rates dampened consumer sentiment, leading to a slowdown in vehicle sales, the report noted, citing Yonhap news agency.
“A combination of sluggish domestic demand and potential U.S. tariffs on vehicle exports will likely continue to weigh on local production,” a KAMA official stated. He urged the government to introduce tax incentives for next-generation vehicle production and facility investments to mitigate the impact on related industries.
Global Rankings and Industry Trends
China remained the world’s top car producer in 2024, manufacturing 31.28 million units, followed by the United States (10.56 million), Japan (8.23 million), and India (6.01 million). The overall global vehicle production declined by 0.5% to 93.95 million units—the first drop since 2020, when production fell by 15.4% due to the COVID-19 pandemic.
Outlook for South Korea’s Auto Industry
Industry forecasts indicate further declines in South Korea’s domestic sales and production due to prolonged economic challenges. The Korea Automobile Manufacturers Association (KAMA) projects domestic car sales to reach 1.7 million units and total vehicle production to hit 4.22 million units in 2024, reflecting annual declines of 2.8% and 0.6%, respectively.
The expected drop in sales is attributed to high interest rates, reduced disposable income, and a cut in electric vehicle subsidies, which could further dampen demand. With ongoing economic uncertainties, South Korea’s auto industry faces mounting challenges in maintaining production levels and competitiveness in the global market.
EV WORLD | Hyundai to Start Electric Vehicle Manufacturing in Turkiye
