Source: Economic Daily
Original title: "South Korea's Automobile Exports Record High"
recentlyfifascratchAccording to data released by the Ministry of Industry, Trade and Resources of Korea, South Korea's automobile exports in April were US$6.8 billion, setting a new record for the highest monthly export volume in five months. In the first four months of this year, South Korea's automobile exports increased by 4.4% year-on-yearfifascratch.7%, at US$24.3 billion, also setting a new high in the same period in the previous year. South Korea's Ministry of Industry said that this is mainly due to the hot sales of models from Hyundai Motor and other manufacturers in the North American market.
Some analysts believe that consumption downgrades and exchange rate factors are the two major driving forces driving the popularity of Korean cars in the North American market. On the one hand, under the influence of high inflation and high interest rates, American consumers tend to buy affordable models. Compared with Japanese cars, Korean cars are more cost-effective. At the same price, you can buy models one level higher than other manufacturers, making them more attractive to family cars. On the other hand, the lower exchange rate of the Korean won against the US dollar is also good for South Korea's car exports.
In the segment, pure electric vehicles have further cooled down, and hybrid vehicles have gained the upper hand, becoming the main force driving South Korea's automobile exports. In April this year, South Korea's hybrid vehicle exports were US$1.06 billion, a year-on-year increase of 55%. José Munoz, global chief operating officer of Hyundai Motor, recently said that the company's electric vehicle factory originally located in Georgia, USA, will increase the production of hybrid vehicles.
However, the cooling of trams does not mean that South Korea's auto industry will fall back to the route of traditional oil trucks. In March this year, Hyundai Motor announced that it would redouble its efforts while other established automakers were slowing down electrification, and expected to invest US$51 billion in South Korea over three years to build new R & D infrastructure and electric vehicle assembly lines.
As South Korea's exports continue to recover, South Korea's economy is also recovering rapidly. In the first quarter of this year, South Korea's GDP grew by 1.3% from the previous quarter, much better than economists 'expectations of 0.6%. South Korea's Ministry of Planning and Finance believes that this year's annual growth rate is likely to exceed the previous forecast of 2.2% and the Bank of Korea's forecast of 2.1%.
However, there are still downside risks to South Korea's economic growth. South Korea's credit concerns remain as real estate developers accumulated large amounts of debt during the construction boom during the epidemic. The exchange rate is also a headache. As a country that relies heavily on imported energy and raw materials, further depreciation of the won will increase the pressure on its import costs. "This is good and bad for exporters, but overall it increases uncertainty." Some South Korean economists said that although the rise in the exchange rate of the US dollar against the Korean won will help expand exporters 'income in local currencies, for those companies that rely on overseas manufacturing, the burden is increasing because most of their debt is in foreign currencies.