The automotive market in South Korea is expected to see domestic sales surpassing 1.7 million units this year, driven by the impact of new car models, despite concerns over a slowdown in exports. This marks the first time since 2023 that domestic sales have exceeded 1.7 million units.
According to the Korea Automobile Mobility Industry Association (KAMA) on July 26, the organization analyzed the first half of 2026's performance in domestic sales, exports, and production, along with projections for the second half.
In the first half of the year, domestic sales reached 851,000 units, a 1.3% increase compared to the same period last year. The growth in domestic sales was largely driven by imported vehicles.
Sales of domestic cars fell by 4.8% to 658,000 units, while imports surged by 30% to 193,000 units, thanks to electric vehicle brands like Tesla and BYD.
Notably, electric vehicle sales soared by 113.6% year-on-year, totaling 198,509 units. The share of electric vehicles in the market rose from 11.1% last year to 23.3% this year.
When including hybrid electric vehicles (HEVs) and fuel cell electric vehicles (FCEVs), total sales of eco-friendly vehicles reached 491,498 units, marking a 27.1% increase during the same period. The overall share of eco-friendly vehicles rose from 46.1% to 57.8%.
KAMA anticipates that the growth in domestic sales will accelerate in the second half of the year, projecting sales to reach 865,000 units, a 2.7% increase from last year, bringing the annual total to 1.71 million units. This would be the first time since 2023 (1.75 million units) that domestic sales have exceeded 1.7 million.
The continued growth of eco-friendly vehicles is expected in the second half, with KAMA highlighting the anticipated impact of new models such as the Hyundai Tucson, Avante, Santa Fe, and Genesis hybrid models.
In the first half, exports increased by 2.1% to 1.441 million units. The share of eco-friendly vehicle exports rose from 30.0% last year to 37.0%.
HEV exports totaled 379,000 units, a 28.5% increase from last year, driven by an expanded lineup including the Staria and Grand Koleos.
Electric vehicle exports also grew by 20.6% to 155,000 units, supported by new models such as the Kia EV3, EV4, and EV5, as well as the purpose-built mobility (PBV) PV5.
However, for the second half, exports are projected to decline by 0.3% year-on-year to 1.32 million units due to high inflation and interest rate hikes in major countries. The annual forecast for exports is a 0.9% increase to 2.76 million units.
Production saw a slight decrease of 0.1% in the first half, but is expected to rebound by 1.5% in the second half due to recovery from production disruptions and the launch of key new models. The annual production forecast is a 0.7% increase to 4.13 million units.
* This article has been translated by AI.
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