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South Korea remains one of the world’s top auto manufacturing nations. In 2024, domestic vehicle production totaled 4.13 million units, a 2.7% drop from 2023. Of these, about 67% (2.78 million units) were exported, with the remainder sold domestically. This output decline was attributed to weak domestic demand amid high inflation and interest rates. South Korea’s global production ranking slipped to 7th in 2024, underlining the pressures on its auto sector.

Table 1: South Korea Annual Vehicle Production and Exports (2024–2030)

Production will remain in the mid-4 million unit range through the decade. By 2030, annual production could approach ~4.5–4.7 million units, driven largely by electrified vehicles. Government targets for EV production imply around 3.3 million EVs produced domestically by 2030, signaling a major shift from traditional internal combustion models. Historically, 60–70% of Korean-made vehicles are exported, a trend expected to continue or grow slightly.

Â鶹ԭ´´ Share of Major Automakers:

The Hyundai Motor Group dominates the domestic market. In 2024, Hyundai Motor sold 705,010 vehicles (52% market share), and Kia sold 540,010 (39.6% share). GM Korea, KG Mobility, and Renault Korea Motors hold only low-single-digit shares. Imported brands reached a record 16–17% share in 2024, led by Tesla, which saw explosive growth. Hyundai and Kia’s domestic sales fell, while Genesis maintained a strong premium position.

Segmentation by Fuel Type:

EVs, FCEVs, and ICEs. Out of 1.63 million new vehicles sold in 2024, about 6.1% were EVs (~99,000 units). EV sales declined slightly, though they still outperformed the overall market. Hybrid vehicles surged to about 384,000 units (23–24% share). PHEVs and FCEVs remain niche. ICE vehicles still dominate, but their share is shrinking. By 2030, battery EVs could reach 30–40% of annual new vehicle sales, hybrids around 30%, and ICEs falling below 30%.

Domestic Sales vs. Export Trends Korean automakers exported about 2.78 million vehicles in 2024, while domestic sales were 1.63 million. Export value reached $70.8 billion. North America is the largest export market, especially the U.S. Exports to the EU dropped, while shipments to Asia and the Middle East grew. Domestic sales are likely to remain flat or decline, with a slight recovery to 1.7–1.8 million units by 2030. Export growth is more promising, especially for hybrid and EV models.

Government Policies and Regulations Influencing the Industry

• EV Subsidies: Focus on long-range and high-performance EVs, with youth bonuses to encourage first-time EV buyers.
• Tax Incentives: Registration tax exemptions and investment tax credits for green technologies.
• Infrastructure: Expansion of EV charging stations and hydrogen fueling infrastructure.
• Regulations: Tightening emissions standards and corporate average fuel economy requirements.
• R&D Support: â‚©21 trillion investment plan supporting EVs, batteries, and autonomous vehicles.
• Hydrogen Roadmap: Targeting millions of hydrogen vehicles by 2040, with incentives and infrastructure expansion.

Emerging Technologies and R&D Efforts

• Batteries: Advancing solid-state batteries and securing raw materials.
• Autonomous Driving: Testing Level 3/4 features; aims for commercial deployment by late 2020s.
• Software-Defined Vehicles: Over-the-air updates and in-car digital ecosystems.
• Mobility Services & UAM: Exploring ride-sharing, robotaxis, and urban air mobility.
• Green Hydrogen: Fuel-cell systems for trucks and broader mobility applications.
• Design & PBVs: Custom-built EV vans and lightweight, efficient vehicle designs.

Key Challenges Facing the Industry

• Supply Chain Risks: Chip shortages and dependency on imported materials.
• Global Competition: Chinese EV makers and Japanese hybrid leaders.
• Domestic Saturation: Aging population and reduced car ownership among youth.
• Labor & Cost: High labor costs and union pressures.
• Regulatory Uncertainty: Changing global trade and environmental rules.
• Investment Burden: High costs of transitioning to EVs and autonomous tech.
• Energy & Environment: EV charging demands, battery recycling, and green energy integration.

Outlook and Projections through 2030:

South Korea is expected to maintain vehicle production in the 4–5 million unit range, with a majority being electrified by 2030. Domestic sales may slowly recover, while export volumes remain strong, shifting toward higher-value EV and hybrid models. Hyundai, Kia, and Genesis will continue to lead, supported by robust government policy and R&D investment. If targets are met, South Korea will remain a global leader in automotive innovation, especially in electric mobility and autonomous driving solutions.