Korea retreats to fourth in vehicle shipments
Korea has lost its position as the world’s third-largest automobile exporter to Mexico during the first eight months of this year, according to figures released by the Korea Automobile Manufacturers Association on Sunday. The country held the rank for 11 years.
Korean carmakers shipped 1.69 million vehicles overseas during the January-August period, down 14.4 percent from the same period a year earlier on its weakened competitiveness. Korea trailed Germany’s 2.94 million, Japan’s 2.93 million and Mexico’s 1.82 million during the eight months.
This is the first time Korea has fallen behind Mexico since it began exporting cars, and Korea has stepped down to fourth for the first time since 2005, when it went up from No. 5 after outperforming Spain and the United States. The association cited a slow economy and shrinking demand in key automotive markets such as the Middle East and Latin America as the key reason for Korea’s fall.
Mexico, on the other hand, has become a major manufacturing base ever since the country signed the North American Free Trade Agreement with the United States and Canada in 1994 and scrapped tariff and trade barriers. Its low-cost labor and border with the United States have also been cited as the country’s advantages.
Korea’s second-largest automaker, Kia Motors, recently opened a factory in Mexico, in a bid to target the U.S. market.
“For the automobile industry to overcome its saturated growth at home and sustain its growth, expanding exports is a must,” the association said. “Manufacturers as well as the government should make coordinated efforts to pioneer into new markets and boost competitiveness.”
Korea’s top automaker, Hyundai Motor, has been facing continual strikes from its labor union this year. The accumulated loss is estimated at 3 trillion won ($2.7 billion).
BY SEO JI-EUN [email@example.com]
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