The total number of new car registrations in South Korea for the first three quarters of this year has reached an 11-year low. This drop is attributed to rising interest rates and a temporary slowdown in demand for electric vehicles amid a global economic slowdown. Annual domestic car registrations for this year are expected to be the lowest since 2013.
According to data released by the Korea Automobile Manufacturers Association (KAMA) on Oct. 30, South Korea’s new car registrations from January to September this year totaled 1,209,154 units, a decrease of 8.7 percent from the same period last year. This marks the lowest figure since 1,175,010 units were registered in the first three quarters of 2013.
The shift away from traditional internal combustion engine vehicles due to decarbonization efforts has sharply reduced registrations of gasoline and diesel cars. Gasoline-powered cars, which still represent the largest share of new registrations, saw a 19.6 percent decline compared to the same period last year, while diesel car registrations fell 56.7 percent from 228,000 units to 99,000 units.
Registrations for hybrid vehicles set a record high at 355,000 units for the first three quarters of this year, but this represents only a modest increase of 6,000 units compared to the same period last year. Electric vehicle registrations declined by approximately 10,000 units, from 118,000 units in the first three quarters of last year to 108,000 units during the same period this year.
Annual new car registrations in South Korea are projected to barely surpass 1.6 million units this year, marking an 11-year low. Industry analysts attribute this to a decline in demand driven by a global economic slowdown, following a period last year when pent-up demand was largely fulfilled post-COVID. Additionally, high interest rates have deterred consumers from taking out loans to purchase new vehicles, contributing to the downturn in the domestic market.
After reaching 1,544,000 units in 2013, annual new car registrations in South Korea surpassed 1.8 million units for the first time in 2015, reaching 1,834,000 units, and peaked at 1,906,000 units in 2020 during the pandemic. However, registrations have gradually declined to 1,735,000 units in 2021, 1,684,000 units in 2022, and 1,720,000 units in 2023.
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