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| Vehicles are parked for export at a port near a Hyundai Motor plant in Ulsan in this 2021 file photo. Yonhap |
By Park Jae-hyuk
Korea's automobile exports could drop 4.2 percent to 2.1 million units next year, if the U.S. refuses to offer tax benefits for consumers purchasing Korean electric vehicles (EVs) manufactured outside of North America, in accordance with the Inflation Reduction Act, the Korea Automotive Technology Institute (KATECH) said Monday.
KATECH said in its report that the Korean automobile industry is expected to face declines in domestic consumption, exports and production in 2023, despite a highly probable increase in global demand.
"Domestic consumption is expected to fall 0.5 percent to 1.65 million units," it said. "Due to the sluggish domestic consumption and exports, production will likely decline 3 percent year-on-year to 3.49 million units."
The institute, however, added that the export decline could moderate if the U.S. decides to continue offering tax benefits for a while for purchases of Korean EVs assembled outside of North America.
"The export volume next year depends on the shipments of EVs to the U.S.," it said.
Regarding global demand for automobiles, KATECH expected the sale of cars worldwide to go up 4.7 percent to 85.3 million units in 2023 from 81.5 million units this year, given that the global semiconductor supply shortage has eased.
Although the institute forecast declining sales volume in the U.S. and Europe next year, it expected automobile sales volume to continue to rise in China, thanks to Beijing's policies to boost demand.
"The volume of global automobile sales will likely bounce back to 97 million units in 2025, due to the rising demand for EVs," the institute said, expecting the global demand for such vehicles to reach 20 million units in 2025.
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