Auto exports drop for 12th straight monthKorea’s automobile exports fell for a 12th straight month, taking a hit from several fronts, including union strikes at local automakers and slow economic growth in emerging markets, new figures show. Experts warned of a further slump if U.S. President-elect Donald J. Trump enacts his protectionist policies.
The Ministry of Trade, Industry and Energy said Thursday that automobile exports dropped 13.1 percent year on year to 216,931 units last month. It has been continually falling since November 2015.
In dollars, it was an 11.8 percent year on year drop to $3.37 billion.
“Automobile production fell due to strikes in the automotive industry,” said Lee Won-joo, a director at the ministry. “The economy in emerging markets, including countries in the Middle East and Latin America, which has weakened, also dragged down the Korea’s automobile exports figure.”
Exports to most regions dropped compared to last year, the ministry said. The only regions that saw increases were the European Union (a 32 percent increase to $501 million) and Oceania (a 12.4 percent increase to $206 million).
Exports to North America fell 11.8 percent to $1.3 billion. The figure for the Middle East fell 33.4 percent to $624 million. Exports to Asian countries dropped 32.9 percent, and the figure for Latin America fell 12.1 percent.
Exports of auto parts also fell 6.8 percent to $2.12 billion. Exports to China and Mexico, though, rose by 15.8 percent and 91.5 percent, respectively, as more Korean automakers are operating manufacturing plants there.
Industry analysts expressed concerns that protectionist policies under President Trump will likely take its toll on Korea’s automobile industry.
“Korea is the only automobile manufacturing country that signed a free trade agreement with the United States,” said Kwon Soon-woo, an analyst at SK Securities. “Only 54.5 percent of Korean cars sold in the United States are made in the United States, and they will be hit hard if the next administration decides to go for protectionism as Korean companies will have to pay more tariffs.”
The 54.5 percent figure is lower than 67.5 percent average of foreign competitors, meaning higher tariffs would hit Korean automakers especially hard.
Kwon added that Kia Motors would be affected more by the new trade policies as the automaker recently opened a manufacturing plant in Mexico, where Trump has repeatedly shown willingness to strengthen trade regulations.
In October, automobile production and domestic sales also dropped 14.2 percent and 10 percent from a year earlier.
Automakers manufactured a total of 347,470 units last month. The number of units produced by Hyundai Motor fell 17.9 percent and Kia Motors made 21.8 percent fewer cars than last year.
There were a total of 148,078 units that were sold last month, a 10 percent drop.
Sales of Hyundai Motor dropped 30.4 percent and that of Kia fell 14.1 percent. Even though local automakers struggled last month, sales of foreign vehicles rose 11.2 percent year on year and 27.3 percent from the previous month.
Foreign cars now account for 15.9 percent of all vehicles sold in Korea. The figure is a rise of 3 percentage points from the 12.9 percent recorded last October.
BY KIM YOUNG-NAM [firstname.lastname@example.org]
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