South Korean cars currently make up 3 percent of the Chinese market, the central bank said in a report on Sunday, claiming that local carmakers should target smaller cities in China currently experiencing growth in purchasing power.
According to the report released by the Bank of Korea, South Korean carmakers saw their market share in China fall gradually after posting a record 9 percent in 2014. As of the January-February period in 2018, South Korean carmakers accounted for only 3.8 percent of Asia's largest economy.
The carmakers' share fell to 2.95 percent in early 2017 due to Beijing's economic retaliation against Seoul following South Korea's decision to deploy a US anti-missile defense system on its soil. The share later recovered to 6.6 percent in December until suffering another drop this year.
(Kia Motors)
China has been experiencing drastic changes in its automobile industry of late, with demand for sports utility vehicles and electric cars rising sharply. In 2017, the average daily sales of automobiles in China came to 79,000 units, making it the world's No. 1 market.
As of 2016, there were 116 cars for every 1,000 people in China, far below the United States' 840 units and South Korea's 416 units. Accordingly, industry watchers expect demand for automobiles will continue to rise in China.
The central bank said that South Korean companies should focus efforts on studying the latest trends in China, and roll out investment centered on new energy and smart automobile technologies.
The BOK also claimed that major Chinese cities, including Beijing and Qingdao, are likely to face regulations related to automobiles due to pollution and traffic congestion, hinting that South Korean carmakers should also set eyes on smaller emerging cities, such as Harbin and Yantai. (Yonhap)