South Korea’s auto industry will likely face drops in domestic sales and production this year due to the prolonged economic downturn and sluggish demand, an industry analysis showed Thursday.

According to the analysis by the Korea Automobile Manufacturers Association (KAMA), domestic car sales and the country’s total vehicle production for 2024 are expected to reach 1.7 million units and 4.22 million units, respectively.

The figures represent 2.8 percent and 0.6 percent decreases, respectively, from last year.

KAMA said domestic sales were expected to fall due to reduced demand for new cars amid high interest rates and decreased disposable income. A reduction in electric vehicle subsidies is also expected to impact demand.

The expected contraction in demand is forecast to weigh down total car production, the association predicted.

Auto exports, on the contrary, are expected to increase by 1.2 percent on-year to 2.8 million units, according to KAMA’s forecast, thanks to strong demand for electric vehicles
in the United States and Europe.

The total value of vehicle exports will likely rise 2.3 percent on-year to US$72.5 billion this year, thanks to an increase in overseas demand of eco-friendly cars and recreational vehicles.

Source: Yonhap News Agency