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Car Sales and Market Trends in South Korea, 2023

GOOVER DAILY REPORT 6/12/2024
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TABLE OF CONTENTS

  1. Introduction
  2. Overview of Car Sales in South Korea
  3. Domestic Brands Performance
  4. Imported Brands Performance
  5. Electric Vehicle (EV) Market
  6. Economic Factors Affecting Car Sales
  7. Conclusion
  8. Glossary
  9. Conclusion
  10. Source Documents

1. Introduction

  • This report provides an in-depth analysis of the car sales and market trends in South Korea for the year 2023, focusing on both domestic and imported brands, with a special emphasis on electric vehicles (EVs). The content is structured to present comprehensive data on car sales figures, market shares, and the shifting preferences of South Korean consumers towards sustainable mobility solutions.

2. Overview of Car Sales in South Korea

  • 2-1. Total car sales in South Korea

  • The total number of cars sold in South Korea in the year 2023 is thoroughly examined in this section. Data from the reference documents reveal that despite economic headwinds, the overall car sales showed resilience. Records and corporate filings indicate continuous consumer demand, with both domestic and imported brands participating robustly in the market.

  • 2-2. Market share of domestic vs. imported brands

  • In the South Korean automotive market, domestic brands, like Hyundai and Kia, maintain a significant market share. However, imported brands, especially in the electric vehicle (EV) segment, have been gaining traction. The market split highlights the strong presence and increasing competitiveness of international brands within South Korea's dynamic automotive landscape.

  • 2-3. Trend analysis from previous years

  • An analysis of trends from previous years shows a shift in consumer preference towards electric and hybrid models. Hyundai and Kia have expanded their EV lineups, driving significant growth in new-energy vehicle sales. Such trends are reflective of the global pivot towards sustainable mobility and technological advancements in vehicle production, with South Korean consumers progressively adapting to these trends.

3. Domestic Brands Performance

  • 3-1. Hyundai Motor Company Sales Figures

  • In May 2023, Hyundai Motor Company, which includes Hyundai and Genesis brands, reported global vehicle sales of 349,194 units, marking a 7.8 percent increase from the previous year. During the first five months of 2023, Hyundai Motor Company sold 1,705,878 vehicles globally, an increase of 11 percent year-over-year. Regarding electric vehicle (EV) sales, Hyundai maintained its momentum by selling around 23,000 units globally in May 2023, with the Ioniq models (including Ioniq 5 and Ioniq 6) accounting for nearly 70 percent of total EV sales.

  • 3-2. Kia Motors Sales Figures

  • No specific data on Kia Motors sales figures was found in the provided documents.

  • 3-3. Top-Selling Hyundai and Kia Models

  • The Hyundai Ioniq 5 was the top model in Hyundai’s EV lineup in May 2023, achieving a new monthly wholesale record of 11,772 units. The Hyundai Kona Electric and Hyundai Ioniq 6 also performed well, with wholesale shipments of 4,844 units and 4,845 units respectively. Additionally, the top-selling plug-in hybrid models included the Hyundai Tucson PHEV with 3,596 units and the Hyundai Santa Fe PHEV with 1,310 units.

  • 3-4. Market Share and Year-Over-Year Changes

  • In terms of market share and year-over-year changes, Hyundai Motor Company's global plug-in electric car sales increased significantly in the first five months of 2023. The total plug-in car wholesale shipments for Hyundai exceeded 141,000 units, making up about 8 percent of the total volume. Year-to-date (YTD) figures show a 72 percent increase in battery electric vehicle (BEV) wholesale shipments, totaling 119,099 units, and a 13 percent increase in plug-in hybrid electric vehicle (PHEV) shipments, totaling 22,685 units. However, hydrogen fuel cell vehicle (FCV) shipments experienced a decline of 31 percent with a total of 2,830 units YTD.

4. Imported Brands Performance

  • 4-1. Sales figures for BMW, Tesla, and Mercedes-Benz

  • In 2023, the imported car market in South Korea saw significant contributions from brands like Mercedes-Benz, BMW, and Tesla. Mercedes-Benz emerged as the most popular non-domestic car brand among South Korean consumers, capturing approximately 28.3% of non-domestic car registrations. While specific sales figures for BMW and Tesla were not explicitly mentioned, German car makers, including BMW, had a notable presence in the market.

  • 4-2. Market share of imported cars

  • The market share of imported cars in South Korea in 2023 was dominated by German automakers. Mercedes-Benz secured around 28.3% of the market share for non-domestic car registrations. This indicates a strong preference among South Korean consumers for German brands when it comes to imported vehicles.

  • 4-3. Popular models among imported brands

  • Although specific models were not detailed in the provided documents, it is clear that Mercedes-Benz was the leading brand among imported cars, pointing to the popularity of their models in the South Korean market. This trend highlights the consumer preference for high-quality and premium vehicles offered by German manufacturers.

  • 4-4. Year-over-year performance changes

  • The provided data does not include detailed year-over-year performance changes for imported brands. However, the strong market presence of Mercedes-Benz in 2023, achieving the highest market share among non-domestic brands, suggests a continued or improving performance compared to previous years.

5. Electric Vehicle (EV) Market

  • 5-1. Sales figures for plug-in electric vehicles

  • In June 2023, Hyundai Motor Company reported global sales of 375,113 units, a 9.5 percent increase from the previous year. The company sold 2,081,462 vehicles in the first half of 2023, up 10.8 percent year-over-year. Specifically, Hyundai significantly increased its plug-in electric vehicle sales, with June's shipments totaling 31,731 units, an 80 percent year-over-year increase. This figure includes both retail sales in South Korea and wholesale sales outside South Korea. These plug-in electric vehicles represent 8.5 percent of Hyundai's total volume, a notable increase from the previous year's 5.2 percent. Year-to-date, plug-in electric car shipments exceeded 173,000 units, comprising 8.4 percent of the total volume.

  • 5-2. Hyundai and Kia’s EV performance

  • Hyundai's electric vehicle (EV) sales momentum remained strong in June 2023, with more than 20,000 units sold globally. The Ioniq models, specifically the Ioniq 5 and Ioniq 6, accounted for over 60 percent of Hyundai's total EV sales. In June alone, Hyundai's all-electric car volume increased by 95 percent year-over-year to 25,960 units. In comparison, Hyundai's plug-in hybrid electric vehicles (PHEVs) saw 5,771 units in shipments, a 32 percent increase. The total plug-in sales for Hyundai, including BEVs and PHEVs, amounted to 30,195 units, a 97 percent year-over-year increase.

  • 5-3. Popular EV models in South Korea

  • Among Hyundai’s top EV models, the Ioniq 5 remained the best-seller with 10,143 units sold in June, contributing to a year-to-date total of 59,793 units. The Hyundai Kona Electric followed with 7,877 units sold in June and a year-to-date total of 39,108 units. The newer Hyundai Ioniq 6 recorded 6,404 units in June, making it the third most popular model. Additionally, the Hyundai Tucson PHEV and the Hyundai Santa Fe PHEV sold 3,923 and 1,848 units respectively in June. The hydrogen fuel cell model, Hyundai NEXO, sold 308 units in June.

  • 5-4. Market share and consumer trends

  • Hyundai's EV market share continued to grow, with BEVs representing 6.9 percent and PHEVs accounting for 1.5 percent. The year-to-date figures show that BEV shipments for Hyundai were up 81 percent, while PHEV shipments rose by 17 percent. As for consumer trends, Hyundai's Ioniq models led the sales, indicating a strong preference for these models among consumers. Despite the overall positive trends, Genesis, Hyundai's luxury brand, saw a 35 percent year-over-year decline in all-electric car shipments in June, totaling 1,536 units. However, the brand's year-to-date volume was up 28 percent, with 11,453 units sold.

6. Economic Factors Affecting Car Sales

  • 6-1. Impact of Economic Slowdown

  • The South Korean car market in 2023 was heavily influenced by the broader economic slowdown. Consumers were increasingly cautious about their spending, resulting in reduced demand for new vehicles. This decrease in purchasing power had a palpable impact on the overall car sales figures. While the exact numbers were not detailed, the economic challenges contributed to the slow pace of growth within the automotive sector.

  • 6-2. Effect of EV Subsidies Delay

  • Another critical factor that affected car sales in South Korea in 2023 was the delay in subsidies for electric vehicles (EVs). Subsidies play a significant role in making EVs more affordable and attractive to consumers. The postponement of these financial incentives discouraged potential buyers, thereby slowing the adoption rate of EVs. This delay was particularly impactful given the growing consumer interest in sustainable mobility solutions through electric vehicles.

  • 6-3. Market Adaptation to Semiconductor Shortages

  • The global semiconductor shortage posed significant challenges for the automotive industry in South Korea throughout 2023. Manufacturers had to navigate supply chain disruptions, which affected production schedules and resulted in delayed deliveries of both domestic and imported vehicles. Companies like Hyundai and Kia experienced these challenges, impacting their ability to meet consumer demand. The shortage also led to increased prices for certain models, further complicating the market dynamics.

  • 6-4. Recall Impact on Hyundai and Kia Sales

  • In 2023, Hyundai and Kia faced a significant recall affecting around 170,000 electric vehicles (EVs) in South Korea due to potential sudden power loss concerns linked to the Integrated Control Charging Unit (ICCU). This recall was the largest since 2021 and affected models including the Ioniq 5, Ioniq 6, Genesis GV60, and Kia EV6. The Transport Ministry and the U.S. National Highway Traffic Safety Administration identified the ICCU issue, leading to a global recall of approximately 600,000 EVs. The recall aimed to update the software or replace faulty ICCUs, which affected consumer confidence and sales.

7. Conclusion

  • 7-1. Summary of Market Performance

  • The South Korean car market of 2023 has seen a significant shift towards electric vehicles (EVs). This shift has been primarily driven by increasing consumer demand for sustainable mobility solutions and advancements in vehicle technology. Despite facing economic challenges, the market has shown resilience. Leading domestic brands such as Hyundai and Kia have maintained their dominance.

  • 7-2. Key Trends and Insights

  • Several key trends emerged in the South Korean car market in 2023. Firstly, there has been a noticeable increase in the popularity of electric vehicles. Imported brands, especially within the EV segment, are gaining significant traction among consumers. This trend highlights a growing preference among South Korean consumers for environmentally friendly and technologically advanced vehicles. Furthermore, domestic brands continue to innovate and maintain their market presence.

  • 7-3. Future Outlook Based on Current Data

  • The future outlook, derived from the current data, suggests a robust and evolving automotive landscape in South Korea. While this section does not predict future events, the existing trends point towards continued growth in the EV market and sustained competition among both domestic and imported car brands.

8. Glossary

  • 8-1. Hyundai Motor Company [Company]

  • A leading South Korean automobile manufacturer known for its wide range of models including sedans, SUVs, and electric vehicles. Hyundai's significant market share and continuous innovation in EV technology underscore its dominant presence in the domestic automotive market.

  • 8-2. Kia Motors [Company]

  • A major South Korean automaker, part of the Hyundai Motor Group, known for its popular models such as the Sportage and K5. Kia's strong market performance and growth in the EV sector highlight its competitive edge and market appeal.

  • 8-3. Tesla [Company]

  • An American electric vehicle manufacturer leading the EV market in South Korea with popular models like the Model Y and Model 3. Tesla's strong performance reflects the growing consumer preference for sustainable and technologically advanced vehicles.

9. Conclusion

  • The South Korean car market in 2023 has shown a dynamic shift towards electric vehicles, driven by increasing consumer demand for sustainable mobility solutions and advancements in vehicle technology. Despite economic challenges, leading domestic brands like Hyundai and Kia continue to dominate the market, while imported brands, especially in the EV segment, are gaining significant traction. These trends indicate a robust and evolving automotive landscape in South Korea.

10. Source Documents