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Automobile production falling in South Korea

Automobile production falling in South Korea


The Korean Automobile Manufacturers Association announced on October 9 that a total number of 258,026 vehicles were manufactured in South Korea last month, 22.7% less from a last year, and the number reached the lowest level in the past 11 years.

Reason for the fall

This shrink can be attributed at least in part to strikes by the workers in the automobile sector.

According to the Ministry of Trade, Industry & Energy, the number of hours lost in the strike amounted to a total of 100 in Hyundai Motor Company, 44 in Kia Motors and another 12 in GM Korea, which eventually resulted in the production loss of 79,000 vehicles and an export loss of US$1.14 billion.

Last month, the Hyundai Motor Company’s production volume fell by around 29.2% and those of Kia Motors, GM Korea and Renault Samsung Motors decreased by 26.1%, 7.4% and 6.5%, respectively.

Automobile production falling in South Korea
Automobile

In contrast to this, Ssangyong Motors’ production increased by 4.5% with the popularity of its Tivoli on the rise in Europe. Their production volume for the first nine months of this year to a total of 3,031,093, down 10% from the last year, in South Korea.

Considerably

In the meantime, their overseas production is considerably increasing.

Specifically, the amount increased to about 12.4% year on year to a total of 423,582 last month. The gap between their production volumes in and out of South Korea is widening as well. For the first three quarters of this fiscal year, for example, the number of cars they produced in the country was 290,752 less than Hyundai’s and Kia’s overseas production volume (3,321,845).

Automobile production falling in South Korea
Kia Motors

In the case of Hyundai Motor Company, the number of cars it produced in South Korea and sold abroad this year dropped by 18% from a year ago while that of those it produced and sold abroad rose by 5%. The figures fell 17.2% and increased 9.2% for Kia Motors during the same period. “South Korean automakers are increasingly resorting to overseas production due to the high labor costs and low productivity in the country,” said an industry source.

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