This photo, provided by the Incheon Port Authority on March 18, 2024, shows cars awaiting shipment overseas at a port in the western city of Incheon. (Image courtesy of Yonhap)
SEOUL, Oct. 31 (Korea Bizwire) – New car registrations in South Korea have fallen to their lowest level in 11 years during the first three quarters of 2024, according to data released by the Korea Automobile Mobility & Industry Association (KAMA) on October 30.
Total new vehicle registrations for January through September reached 1,209,154 units, marking an 8.7% decrease compared to the same period last year. This represents the lowest figure since the first three quarters of 2013, when registrations totaled 1,175,010 units.
The decline is attributed to multiple factors, including high interest rates and a global demand slowdown, particularly in the electric vehicle sector following a temporary stagnation in demand. Industry analysts project that annual domestic car registrations for 2024 will likely hit their lowest point since 2013.
The impact of decarbonization efforts in the automotive industry has led to a significant decrease in traditional internal combustion engine vehicle registrations, while eco-friendly vehicle sales haven’t increased enough to offset the decline.
Gasoline vehicle registrations fell 19.6% (from 641,000 to 515,000 units), while diesel vehicle registrations plummeted 56.7% (from 228,000 to 99,000 units), representing a combined decrease of 255,000 units.
While hybrid vehicle registrations reached a record high of 355,000 units in the first three quarters, this represented only a modest increase of 6,000 units (27.6%) from last year. Electric vehicle registrations actually decreased by approximately 10,000 units (7.9%), falling from 118,000 to 108,000 units.
Annual new car registrations are expected to barely exceed 1.6 million units this year, marking the lowest level since 2013. This projection falls below KAMA’s earlier forecast of 1.7 million units, which had already anticipated a 2.8% year-over-year decline.
For historical context, domestic new car registrations grew from 1.54 million units in 2013 to first surpass 1.83 million in 2015, peaking at 1.91 million in 2020 during the COVID-19 pandemic. Since then, registrations have steadily declined: 1.74 million in 2021, 1.68 million in 2022, and an expected 1.72 million in 2023.
Industry experts attribute the downturn to several factors, including the resolution of pent-up demand from the COVID-19 period and the impact of the global economic slowdown.
Professor Kim Pil-soo of Daelim University noted that high interest rates are particularly deterring consumers who would typically finance their vehicle purchases through loans, adding that “South Korea is more susceptible to economic downturns compared to other developed nations, and consumers are particularly hesitant to purchase new vehicles due to the burden of high interest rates.”
Kevin Lee (kevinlee@koreabizwire.com)
