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Car exports set to fall for first time in five years: Sources

Published: 03 Dec. 2025, 11:32

This undated file photo shows vehicles lined up at a port before being shipped overseas. [YONHAP]

Korea's vehicle exports are expected to decline in 2025 for the first time in five years due to increased overseas production and U.S. import tariffs, industry sources said Wednesday.

The Korea Automobile & Mobility Association (KAMA) estimated this year's vehicle exports at 2.71 million to 2.72 million units, down 2.3 to 2.6 percent from 2.78 million units a year earlier, according to the sources.

If the forecast holds, it will mark the first annual decline since 2020, when the Covid-19 pandemic disrupted global vehicle shipments, they said.

Vehicle exports fell to 1.88 million units in 2020 from 2.4 million units the previous year. Shipments then rebounded steadily, rising from 2.04 million units in 2021 to 2.76 million in 2023, KAMA data showed.

The projected drop this year is attributed mainly to weaker shipments to the United States, the largest overseas market for Korean carmakers.

From January to October, Korea exported 2.25 million vehicles, with about 460,000 units expected to be shipped in the final two months of the year.

In the first 10 months, exports to the U.S. accounted for 49 percent of the total. Shipments to the market fell 7.9 percent on year to 1.1 million units.

The decline followed Hyundai Motor Group's launch in October of Hyundai Motor Group Metaplant America, its dedicated U.S. electric vehicle plant. The group plans to expand the plant's annual capacity from 300,000 to 500,000 units to meet local demand.

Although the U.S. government recently reduced tariffs on Korean-made cars to 15 percent from 25 percent, industry officials say tariff burdens are still expected to weigh on exports to the American market.

"If Hyundai Motor Group raises U.S. retail prices to maintain profitability, local demand for Hyundai and Kia models may weaken, leading to further declines in shipments," an industry official said.

Yonhap