South Korea's unit price of exported cars falls for 1st time in 8 years

Seoul, Jan 26
The unit price of South Korea's exported vehicles last year fell for the first time in eight years amid a prolonged slowdown in electric vehicle (EV) sales, data showed on Sunday.

South Korea exported 2.78 million units of cars worth $64.1 billion last year, according to data by the Korea Automobile Manufacturers Association (KAMA).

The average exporting price per unit totalled $23,048, down $221 from a year earlier, reports Yonhap news agency.

This is the first on-year decrease since 2016, when the unit price stood at $14,264. Over the past years, the unit price had shown constant growth, peaking at $23,369 in 2023 on the back of rising demand for high-priced EV.

The recent decline, however, is blamed on waning global demand for eco-friendly cars during the so-called EV chasm, a transitional phase before the widespread adoption of EVs.

South Korea's exports of eco-friendly cars had been on a steady rise from $4.21 billion in 2018 to $23.48 billion in 2023, but dropped to $22.43 billion last year.

In particular, overseas sales of EVs plunged 26.6 percent on-year to 254,000.

"The rise in the unit price of vehicle exports in recent years has been largely influenced by rising demand for eco-friendly cars, mainly EVs," an industry insider said. "The EV Chasm, combined with production disruptions caused by heavy snowfall in November last year, led to a decline in EV exports."

Meanwhile, industry ministry said the government will spend 1.5 trillion won ($1.02 billion) this year to induce consumers to purchase electric vehicles (EVs).

The move is aimed at revitalising domestic demand for EVs amid sluggish sales driven by safety concerns and a lack of access to charging stations, according to the Ministry of Trade, Industry and Energy.

The accumulated number of EVs and hydrogen fuel cell cars stood at 720,000 as of end-2024, with EVs accounting for 680,000, reports Yonhap news agency.

Domestic EV sales dropped 9.7 per cent on-year to 147,000 in 2024, marking a decline for the second consecutive year.