Seoul, March 10 South Korea ranked seventh in the world in terms of domestic vehicle output last year, an industry association said on Monday, down one notch from a year earlier due to a drop in output amid an economic slowdown.
The country's domestic car production fell to 4.13 million units in 2024 from 4.24 million a year ago as local consumption slowed, according to a report released by the Korea Automobile & Mobility Association (KAMA).
High inflation and high interest rates weighed on consumer sentiment in 2024, driving down vehicle sales in the domestic market, the KAMA report said, reports Yonhap news agency.
"A combination of sluggish domestic demand and possible U.S. tariffs on vehicle shipments to the United States will likely continue to weigh on local production," a KAMA official said.
He called on the government to provide carmakers with more tax benefits for local production of next-generation vehicles and facility investments to minimise the impact of declining production on related industries.
China, the United States, Japan and India were the top four car manufacturing countries last year, with 31.28 million units, 10.56 million, 8.23 million and 6.01 million, respectively, the report said.
The world's overall vehicle production fell 0.5 percent to 93.95 million units last year, marking the first on-year decline since 2020, when the corresponding figure plunged 15.4 percent due to the COVID-19 pandemic.
Meanwhile, South Korea's auto industry will likely face drops in domestic sales and production this year due to the prolonged economic downturn and sluggish demand, an industry analysis showed last year.
According to the analysis by the Korea Automobile Manufacturers Association (KAMA), domestic car sales and the country's total vehicle production for 2024 were expected to reach 1.7 million units and 4.22 million units, respectively.
The figures represent 2.8 percent and 0.6 percent decreases, respectively, from last year.
KAMA said domestic sales were expected to fall due to reduced demand for new cars amid high interest rates and decreased disposable income. A reduction in electric vehicle subsidies is also expected to impact demand.
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