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Auto exports jump nearly 30 pct in Aug. on strong eco-friendly car sales

11:00 September 19, 2023

SEOUL, Sept. 19 (Yonhap) -- South Korea's car exports jumped 28.7 percent on-year in August on the back of solid global demand for electric vehicles and other eco-friendly cars, the industry ministry said Tuesday.

The value of outbound shipments of automobiles came to US$5.29 billion last month, compared with $4.12 billion a year earlier, according to data from the Ministry of Trade, Industry and Energy.

It is the highest figure for any August, it added.

Auto exports logged double-digit on-year growth for 14 consecutive months until August. During the first eight months of 2023, auto exports surged 39.5 percent on-year to $46.85 billion.

North America was the No. 1 export destination for South Korean cars last month, with sales rising 28.1 percent on-year to $2.59 billion in August.

Shipments to the European Union surged 66.2 percent to $859 million, and those to Asian nations increased 15.2 percent to $435 million. Exports to the Middle East went up 29.3 percent to $462 million.

This file photo, provided by Hyundai Motor Co. on April 13, 2023, shows its all-new KONA Electric subcompact SUV. (Yonhap)

Strong global demand for eco-friendly vehicles led the overall growth of car exports.

The export value of eco-friendly cars soared 47.8 percent on-year to $1.79 billion in August.

In terms of volume, exports of eco-friendly vehicles climbed 29.4 percent on-year to 53,383 units last month, meaning one out of every three South Korean cars sold in the global market was an eco-friendly one.

In detail, sales of electric vehicles (EVs) and hydrogen models spiked 87 percent on-year to $1.05 billion, and those of hybrid models advanced 19.5 percent to $580 million.

"The brisk sales came as South Korean commercial vehicles are entitled to enjoy a tax benefit under the U.S.' Inflation Reduction Act (IRA) regardless of other conditions. Accordingly, the proportion of sales of our commercial vehicles in the U.S. market jumped to around 55 percent in August from 5 percent last year," the ministry said in a release.

The IRA offers tax credits of up to US$7,500 to each buyer of a new EV assembled in North America and with batteries made of a certain amount of critical minerals produced in the region, but those conditions do not apply to commercial vehicles.

Sales of South Korean EVs in the U.S. have logged an on-year growth for nine months in a row, the ministry said.

Domestic production rose 9.6 percent on-year to 311,959 units in August on the back of the smooth supply of automotive semiconductors.

At home, however, car sales inched down 0.7 percent to 130,667 units last month, as foreign brands saw their sales in South Korea fall 11.2 percent on-year to 24,029 units combined, the data showed.



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