South Korea steps on accelerator pedal for record 2024 car exports

ASAN, South Chungcheong Province – At Hyundai Motor Co.’s manufacturing plant in Asan, over 60 km south of Seoul, thousands of robots were busy cutting, welding and moving auto parts to make a finished vehicle every 53 seconds on Friday.

The monitor dangling near the factory roof was flickering with a sign that said “100%,” meaning the plant was running at full capacity.

Hyundai, South Korea’s top automaker, is churning out some 1,100 vehicles such as the Sonata and the Grandeur in gasoline, liquid petroleum injection (LPi) and hybrid types as well as the IONQ 6 electric sedan a day, totaling 300,000 units annually.

All vehicles produced at the Asan plant then moved to Pyeongtaek Port in Gyeonggi Province for exports to 147 countries.

“Vehicle exports are booming. Some 6,300 units are waiting for shipment here, exceeding the dock’s appropriate storage capacity of 5,500 units,” said a Hyundai official at the seaport. “We expect export volume from Pyeongtaek to hit a record high this year.”

TRADE MINISTRY REVISES UP CAR EXPORT TARGETS

Hyundai Motor and its sister firm Kia Corp. – Korea’s two largest automakers – became the country’s highest earners in 2023, buoyed by robust sales of pricey cars under the Genesis brand, sport utility vehicles and eco-friendly cars.

Earlier this year, domestic car industry officials expected car exports to slow in 2024, given that the pent-up “revenge consumption” following the end of the COVID-19 pandemic has fizzled out.

The slower-than-expected EV uptake due to weak charging infrastructure has also dimmed the growth outlook.

However, government data tells a different story.

According to the Ministry of Industry, Trade and Energy on Monday, Korea’s car exports in the first four months of the year reached a record high of $24.3 billion, up 4.7% from the year-earlier period.

Overseas shipments of eco-friendly vehicles such as hybrids, EVs and hydrogen cars also hit an all-time high of $8.16 billion in the January-April period.

While exports of EVs and hydrogen vehicles fell 8.4% year on year, exports of hybrid vehicles rose 9.9%, government data showed.

Encouraged by the strong data, the ministry on Monday revised Korea’s vehicle and auto parts export targets to $100 billion this year.

Previously, the ministry said it aims to achieve $75 billion in car exports and $23.4 billion in auto parts exports in 2024.

If the goal is achieved, vehicles will become Korea’s second-highest export item after semiconductors.

AUTO PARTS, CRITICAL TO CAR EXPORT GROWTH

Automobile parts are a key item supporting Korea’s strong vehicle export growth.

Hyundai Mobis Co., Korea’s largest auto parts maker and a Hyundai Motor affiliate, said that the type of its main products has increased to 30, mostly for electric cars. Previously, it produced 10 auto parts for internal combustion engine (ICE) vehicles.

“We posted record sales of 10 trillion last year. This year, we expect our sales revenue to grow by an additional one trillion won,” said a company official.

Kornec Corp., a small auto parts maker, is one of many Korean firms benefiting from the industry’s electrification shift.

With government support, the company transformed into an EV parts maker in 2019 and is now supplying key electric components to Tesla Inc., the world’s top EV maker.

The Korean government plans to provide broader support to the auto parts industry through the Future Auto Parts Industry Act, which will take effect in July.

Write to Sul-Gi Lee at surugi@hankyung.com
In-Soo Nam edited this article.