Auto Exports And Domestic Sales Fall

South Korea's automobile industry faced a decline in both exports and domestic sales in September 2026, according to data released by the Ministry of Trade, Industry and Energy. Automobile exports dropped to $6.05 billion, marking a 5.5% decrease compared to the same period a year ago. Domestic sales also nosedived by 14.3% to 135,000 units.

The decline in exports was largely attributed to unfavorable external conditions, with export figures to the North American and European Union markets increasing by 9.2% and 15.3%, respectively. However, performance in Asia and the Middle East was particularly concerning, with exports plummeting by 60.0% and 7.1%, respectively. Logistics challenges due to ongoing conflict in the Middle East and tighter regulations on used-car exports were cited as major contributing factors.

The domestic market faced its own obstacles, exacerbated by seasonal factors such as the early Chuseok holiday travel and the reduction in electric vehicle subsidies. The shortened business days due to Chuseok, coupled with delayed purchases owing to the depletion of subsidies and customers waiting for new models, resulted in slower sales. Production figures, however, saw a slight uptick, rising by 3.7% to 347,000 units, supported by wage negotiations settlements and the lingering impact of strikes from the previous year.

Despite the overall market contraction, eco-friendly vehicles emerged as a bright spot, with exports surging by 5.9% to $2.89 billion, accounting for nearly half of total automobile exports. Eco-friendly vehicle shipments totaled 98,803 units, with hybrid vehicles comprising 67% of the volume, totaling 66,516 units. In the domestic market, imported electric vehicles, notably the Tesla Model Y, gained significant traction.

The Model Y ranked number one in domestic sales, surpassing popular models like the Grandeur and Avante. Tesla's sales of the Model Y in South Korea alone reached 12,372 units, a 36.4% increase from the previous year, positioning it third in sales rankings after Hyundai Motor and Kia. By contrast, eco-friendly vehicle sales, particularly hybrid and hydrogen models, faced a steep decline, with hydrogen vehicle sales dropping by an astounding 72.4% to just 365 units.