Domestic automobile production saw a 7.2 percent decrease last year compared to 2015, marking the lowest production rate for local automakers in six years, according to the Korea Automobile Manufacturers Association.
Seven domestic automakers -- Hyundai Motor, Kia Motors, GM Korea, Ssangyong Motor, Renault Samsung Motors, Daewoo Bus and Tata Daewoo -- manufactured a combined total of roughly 4.23 million units in Korea last year, down 330,000 vehicles.
The decline in domestic production is widely attributed to sluggish exports linked to an economic downturn and production disruptions caused by long-term strikes.
(Yonhap)
Hyundai Motor Company, the nation’s top automaker, experienced its largest-ever labor strike last year. The labor union conducted its first nationwide, full-day walkout in 12 years, demanding higher wages for employees. The auto giant was subsequently hit with an estimated loss of some 3.1 trillion won ($2.66 billion) and a production decrease of 142,000 units.
However, despite the slump in domestic production in 2016, the number of Korean car brand units being manufactured overseas has risen.
International production of domestic companies rose by 5.5 percent on-year. Overseas production of domestic vehicles increased by more than 1 million units from 3.36 million to 4.65 million units, making last year the first time the local automotive industries’ overseas production outpaced the domestic market.
With lower labor costs and increased gains in international branding, the number of Korean cars produced off the peninsula has doubled in less than a decade.
Last month Hyundai Motor Group pledged to invest $3.1 billion in the United States in the next five years.
Hyundai Motor also went on to establish its fourth Chinese plant last October in Changzhou. The company’s fifth Chinese factory in Chongqing is slated to be completed later this year.
On the other hand, Kia Motors is continuing to eye the American market, recently opening its fourth overseas plant in Mexico last year, with the majority of the plants’ exports shipping to the US.
By Julie Jackson (
juliejackson@heraldcorp.com)
