American car brands ranked second in the imported car market in Korea in 2020, beating those of Japan.
The Korea Automobile Industry Association (KAMA) announced on June 27 that it analyzed automobile exports and imports between Korea and the United States to mark the 10th anniversary of the Korea-U.S. free trade agreement (FTA), which took effect in March 2012.
In 2020, a total of 46,000 U.S. brand cars were sold in Korea, accounting for 15.2 percent of all imported car sales in Korea. They jumped from third place to second, outrunning Japanese cars (21,000 units and 7 percent). First place was taken by German brands (187,000 units), which accounted for 61.9 percent.
Sales of Japanese brands declined for the second consecutive year as Japan sparking off a boycott of Japanese products in Korea by restricting exports of key semiconductor raw materials to Korea in 2019.
On the other hand, sales of U.S. brands have increased for four consecutive years since 2017 due to the removal of tariffs on passenger cars under the Korea-U.S. FTA. As a result, 67,000 units (2.8 percent) were exported to Korea out of the total number of U.S. automobile exports in 2020, making Korea the ninth-largest automobile export market for the United States.
In 2011, just before the Korea-U.S. FTA took effect, Korea ranked 12th and Japan ranked 13th, but the gap widened as Korea took 9th place and Japan 22nd place in 2020, the KAMA said.
Korean cars’ U.S. market share is also on the rise. Hyundai Motor and Kia’s market share in the United States stood at 8.5 percent 2020, close to a record 8.9 percent set in 2011. This year, its market share between January and May reached 9.4 percent. Hyundai Motor Group is planning to invest US$7.4 billion in the United States for local production of electric vehicles for five years until 2025. The Korean carmaker will expand its share of the electric vehicle market in the United States.
GM Korea’s exports to the United States are also growing at an annual average rate of 32.9 percent. The number of vehicles which GM Korea produced in Korea and exported to the United States increased about 13 times over the past 10 years from 18,000 in 2011 to 233,000 2020. Of the 227,000 small sports utility vehicles of GM sold in the United States market in 2020, 80.4 percent (182,000 units) were produced by GM Korea. The number of Korean cars exported to the United States swelled by 237,000 to 825,000 in 2020from 588,000 in 2011.