China’s ‘sharp increase’ in car exports leaves South Korea searching for a solution
- Competition is expected to intensify for South Korean car companies as Chinese firms increase exports with governmental support
- South Korea can boost competitiveness and develop new markets by signing trade deals and incentivising investment, carmakers say
In the face of China’s fast-growing auto industry that ranked second in the world last year in terms of car exports, there is a “pressing need” for the South Korean government to implement policies that help exporters compete with their neighbours, according to the Korea Automobile Manufacturers Association.
“The sharp increase in Chinese automobile exports has a negative impact on the expansion of Korean exports,” said the report published on Wednesday.
“Korean companies’ competition with their Chinese counterparts in various local automobile markets is expected to intensify as Chinese companies are expanding their exports with governmental support.”
The South Korean government should help export competitiveness of Korean cars and develop new markets by signing free-trade agreements, while at the same time implementing fully fledged incentive policies to attract investment in production facilities, the report said.
Kang Nam-hoon, the president of the Korea Automobile Manufacturers Association, said incentives were needed to lure foreign and domestic investment in electric vehicle production facilities.
Nearly 50 per cent of China’s electric vehicle exports come from Tesla’s Shanghai factory, while South Korea has not been able to secure electric vehicle production lines from foreign-invested car companies.