Are Auto Exports from South Korea Declining Due to US Tariffs?
Click to start listening
Synopsis
South Korea's car exports saw a notable decline in May, primarily due to reduced shipments to the United States amid heavy tariffs. This shift raises questions about the future of the automobile industry in the region.
Key Takeaways
- Overall exports fell by 4.4% in May compared to the previous year.
- Shipments to the U.S. decreased by 27.1%, totaling $2.5 billion.
- Eco-friendly vehicles saw a 10.2% increase in shipments.
- Domestic automobile sales rose slightly by 0.4%.
- Monthly sales of eco-friendly vehicles surpassed those of combustion vehicles for the first time.
Seoul, June 17 (NationPress) South Korea's automobile exports experienced a decline of over 4 percent year-on-year in May, primarily driven by a significant reduction in shipments to the United States, prompted by Washington's stringent tariffs on imported vehicles, as reported on Tuesday.
Last month, the total value of automobile exports amounted to $6.2 billion, reflecting a 4.4 percent decrease compared to the same month last year, according to the Ministry of Trade, Industry and Energy, as cited by Yonhap news agency.
This figure represents the second-highest export value recorded for any May, yet it marks the second consecutive month of decline.
In terms of volume, vehicle exports decreased by 3.1 percent on a yearly basis, totaling 247,577 vehicles. However, shipments of eco-friendly vehicles surged by 10.2 percent, reaching a new monthly record of 75,000 units, driven by robust demand for hybrid models.
The ministry attributed the overall decline in auto exports to a base effect stemming from a record monthly figure achieved a year ago, along with the impact of the 25 percent tariffs imposed by the Trump administration on all imported vehicles and auto parts.
Exports to the U.S. plummeted by 27.1 percent year-on-year, totaling $2.5 billion in May, while exports to the broader North American region fell by 22.3 percent, amounting to $3.08 billion.
Shipments to the Middle East also decreased by 7.2 percent, totaling $391 million.
Conversely, exports to the European Union and Asia saw increases of 28.9 percent and 45.1 percent, reaching $837 million and $683 million, respectively.
Domestically, automobile sales rose by 0.4 percent year-on-year, totaling 142,000 units in May, while domestic production fell by 3.7 percent, totaling 359,000 units.
Significantly, monthly sales of eco-friendly vehicles surpassed those of traditional combustion vehicles for the first time in South Korea.
More than 73,000 units of eco-friendly vehicles were sold in May, marking a 39 percent increase compared to the previous year, according to the ministry.
Point of View
The decline in South Korea's auto exports highlights the significant impact of U.S. tariffs on the automotive market. While there are challenges, the growth in eco-friendly vehicle sales presents an opportunity for innovation and adaptation within the industry.
NationPress
17/06/2025
Frequently Asked Questions
What caused the decline in South Korea's auto exports?
The decline is primarily attributed to heavy tariffs imposed by the U.S. government on imported vehicles, along with a base effect from last year's record figures.
Which markets saw a decrease in South Korean car exports?
Exports to the United States and the Middle East saw significant declines, while shipments to the European Union and Asia increased.
What types of vehicles are seeing growth in exports?
Shipments of eco-friendly vehicles have increased significantly, with a 10.2 percent rise in May.
