02 March 2018

Korea Vehicle Production : 2017


Korea has been an example of success in the vehicle industry. In the 1960's only a few thousand units per year were being made. By the mid 1970's volume was still in the 30,000 area. Then things took off. By 1979, it reached the 200,000 mark. After five years of consolidation, things sprung into life again in a big way and in 1988, the million units was passed.

Thereafter it was steady progress. 2 million was attained in 1993 and 3 million in 2000. Another million was added by 2007. Factories were being opened overseas but domestic volume was still improving. 2011 was the peak year (4.66 m) but since then it has fallen most years.

Let's look at each producer, especially for the past two years. Remember it is domestic production only. That affects Hyundai and Kia which both have plants elsewhere but the others are exclusively locally made.

Hyundai: It has been the largest Korean manufacturer continuously since 1977. Its best effort was 2012 (1.9 m) and 2017 was the lowest since 2009. Better times are expected in 2018.

Kia: It was top briefly from 1974 until 1976, three years in total. It's top year was 2015 (1.72 m) while 2017 was the lowest since 2010. 2018 should be a return to increase.

GM Korea: Once known as Daewoo it was the biggest from the early 1960's to 1973. Its best year for domestic production was 2007 (0.942m) and 2017 the worst since 2003. What the future holds for the company it is unclear except to say further numerical reduction in production is likely for now.

Samsung: It started production in 1998 and almost immediately hit trouble and Renault got involved. The brand (associated with cars at least) has no real profile outside of Korea. 2017 was only bettered by 2010. Making cars for the Renault-Nissan alliance has been a huge benefit.

Ssangyong: This small specialist brand first dipped its toes into the vehicle manufacturing ocean in 1969. It's had a somewhat turbulent existence since but for now has settled down under the ownership of Indian vehicle manufacturer Mahindra. It's peak was reached last year and 2017 was one of the highest totals yet.

Rest: The two others are small commercial vehicle companies.

Summary: Korea is a large manufacturer of vehicles, helped by an aggressive desire to be successful and a domestic market protected by import tariffs. It has to make more cars offshore and I feel the 4 million currently made there is sufficient in number. Manufacturing close to the major markets you sell in is considered good business practice and it spreads risk. It never pays to have too many eggs in one basket.

Brand 2017 % +/-
2016 % +/-
Hyundai 1,651,710 40.1% -2%
1,679,906 39.7% -10%
Kia 1,522,520 37.0% -2%
1,556,845 36.8% -9%
GM Korea 519,385 12.6% -10%
579,745 13.7% -6%
Samsung 264,037 6.4% 8%
243,965 5.8% 19%
Ssangyong 145,345 3.5% -7%
155,600 3.7% 7%
Tata Daewoo 9,481 0.2% 1%
9,342 0.2% -11%
Daewoo Bus 2,435 0.1% -22%
3,106 0.1% 1%
Total 4,114,913
-3%
4,228,509
-7%

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