Car industry sees trade surplus hit record $60B

The trade surplus posted by the domestic Korean automobile industry surpassed $60 billion for the first time last year on the back of rising exports to emerging countries.

According to data complied by Ministry of Knowledge Economy and Korea International Trade Association (KITA), the nation’s car and auto parts industries registered a trade surplus of $61.7 billion last year, up 5.8 percent from $58.3 billion for 2011.

Carmakers were $42 billion in the black, turning them into the nation’s top profit-earning industry for the first time since 2007 The auto parts industry contributed the remaining $19.7 billion, up 14 percent from 2011.
The figure is more than double Korea’s overall trade surplus of $28.5 billion for last year, which was down 7.5 percent from $30.8 billion in 2011.

Despite the economic slowdown in the European Union and sluggish growth in the South American market, Korea’s car exports gained 0.4 percent on-year to hit 3.16 million vehicles last year on the back of increasing shipments to Eastern Europe and Africa.

The ministry said aggressive marketing by foreign automakers and a lack of new models from Korean brands - coupled with their reduced production due in part to labor strife - curbed the increase in car exports.

The value of car exports grew to $47.2 billion last year, up 4 percent from $45.3 billion in 2011. The ministry said rising exports of premium models like Hyundai Motor’s Grandeur and Genesis led the surge in the value of car exports. Last year’s exports of premium models increased 30 percent from 2011, according to the ministry’s data.

Exports of auto parts jumped 6.5 percent on-year to $24.6 billion as companies ramped up shipments to their overseas units as well as to foreign car manufacturers.

The ministry said FTAs with the United States and the EU, both signed within the last two years, also helped such exports grow. In contrast, imports of auto components fell to $4.9 billion last year from $5.8 billion.

“As the product quality and brand awareness of local cars is increasing, Korean automobile exports will keep increasing,” an industry official said in a release. “Global demand for Korean auto parts is also rising, so the overall contribution of the local automobile industry to the economy will become more important.”

By Joo Kyung-don [kjoo@joongang.co.kr]