S. Korea's May auto exports down; eco cars lead domestic sales

Korea's overseas shipments of automobiles lost ground in May and trade officials are linking the decline to a number of factors.

Moon Ji-young reports.

South Korea's car exports shrank last month as outbound shipments to the U.S. sharply dropped on Washington's hefty tariffs on imported vehicles.

That's according to the latest automotive trends report released by the Ministry of Trade, Industry and Energy on Tuesday, which showed the country's auto exports came at 6-point-2 billion U.S. dollars, down over 4 percent from a year earlier.

The figure marks the second consecutive month of decreases, but is the second-highest export value for any May.

In terms of volume, exports fell by more than three percent on-year.

However, exports of eco-friendly vehicles went up more than 10 percent to record a new monthly high, thanks to strong demand for hybrid cars.

The Trade Ministry attributed the overall decrease in auto exports to a base effect from a record monthly figure posted a year earlier and the impacts of the Trump administration's 25 percent tariffs on all imported cars and auto parts.

Exports to the U.S. decreased by more than 27 percent on-year in May.

The Ministry further explained that this decrease appears to have been influenced by the start of mass local production at Hyundai Motor Group's Metaplant America in the U.S. state of Georgia.

"Meanwhile, here at home, sales of eco-friendly cars have increased by 39 percent from the previous year and now exceed sales of gasoline-powered cars for the first time ever."

This is driven by strong demand for hybrid cars, with sales rising more than 31 percent year on year, as well as EVs and plug-in hybrids.

In terms of domestic production, South Korean carmakers produced 3-point-1 percent fewer vehicles compared to the previous year, recording 359-thousand units due to decreased exports.

Moon Ji-young, Arirang News.