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South Korea's Car Production At Lowest Level In 7 Years

By March 10, 2017 at 7:21 am
Vehicle production in South Korea dropped to its lowest level in seven years during the first two months of 2017. (Photo : Getty Images)

Vehicle production in South Korea dropped to its lowest level in seven years during the first two months of 2017 as a result of soft demand in emerging markets, according to data by the Korea Automobile Manufacturers Association, raising concerns over the auto industry's performance for this year.

For the period between January and February, vehicle output in South Korea came at 634,073 units, down 3 percent from the same period a year ago and the lowest level since 2010, according to data released Friday.

Industry observers said that the drop in vehicle output will make it hard for South Korea to regain its ranking as the world's fifth-biggest car producer this year, according to a report by the Yonhap News Agency.

The decline was due mainly to Hyundai Motor Co.'s cut in production. Vehicle production of the country's biggest carmaker plunged 14.6 percent on-year to 225,725 units during the cited period.

Hyundai's affiliate and the country's second-largest carmaker Kia Motors Corp. recorded an increase of production to 249,815 units from 239,010 during the two-month period.

The three other carmakers in the country, Renault Samsung Motors Co., GM Korea Co. and Ssangyong Motor Co., all recorded higher output.

The total value of vehicles exported from South Korea stood at $2.86 billion in January, down 4.8 percent on-year, according to the data by the Ministry of Trade, Industry and Energy released in February. The number of vehicles shipped overseas also fell 10.1 percent on-year to 179,395 units in January, according to a report by The Korea Herald.

For the entire year 2016, South Korea's auto output was at 4.22 million and was surpassed by India's 4.48 million units for the fifth spot globally. The drop in auto output last year was due to strikes by unionized autoworkers and slow demand from emerging economies.

Analysts expect a gloomy outlook for the country's auto industry this year because of the lack of government measures to spur domestic demand and uncertainties over the global economy. 

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