Seoul: South Korea ranked seventh in the world in terms of domestic vehicle output in 2024, an industry association reported Monday, marking a decline from sixth place the previous year. The drop in ranking is attributed to a reduction in production amid an economic slowdown.
According to Yonhap News Agency, the Korea Automobile and Mobility Association (KAMA) released a report indicating that the country's domestic car production decreased to 4.13 million units in 2024, down from 4.24 million units in the prior year. The decline in production is primarily due to a slowdown in local consumption.
The KAMA report highlighted that high inflation and high interest rates adversely affected consumer sentiment in 2024, resulting in decreased vehicle sales within the domestic market. An official from KAMA mentioned that the combination of sluggish domestic demand and potential U.S. tariffs on vehicle shipments to the United States could further impact local production negatively.
The official urged the government to offer more tax benefits to carmakers for local production of next-generation vehicles and to support facility investments, aiming to mitigate the impact of declining production on related industries. The report also noted that China, the United States, Japan, and India were the top four car manufacturing countries last year, producing 31.28 million units, 10.56 million, 8.23 million, and 6.01 million units, respectively.
The global vehicle production experienced an overall decline of 0.5 percent, totaling 93.95 million units in 2024. This marked the first year-on-year decline since 2020, when production plummeted by 15.4 percent due to the COVID-19 pandemic.