Following the effectuation of the Korea-US Free Trade Agreement in 2012, both countries fully lifted their import tariffs on vehicles early last year. Since the implementation, data shows that Korea’s imports of US cars have increased, while the number of Korean domestic vehicles exported to the US has dropped.
In 2015, 1.06 million units were exported from Korea to the US. Last year, the figure decreased to 964,432 units, according to data from the Korea Automobile Manufacturers Association and the Korea Automobile Importers and Distributors Association.
On the other hand, imports of American cars to Korea have seen a 22.5 percent increase, with imports last year reaching 60,174, compared to 49,096 units the previous year.
Last year also marked the first time the import market exceeded 60,000 units.
The 2017 Chevrolet Cruze (GM Korea)
The increase in imports of US vehicles can be attributed to GM Korea’s ongoing expansion initiatives. The company has already solidified itself as the country’s third-largest automaker, with its market share last year accounting for 9.9 percent of all vehicles sold in Korea. GM Korea’s original equipment manufacturers also nearly doubled last year, jumping from 6,961 in 2015 to 12,593 in 2016.
Domestic sales of US car brands such as Ford, Chrysler and Cadillac also saw an increase, reaching record high sales of 18,291 units last year.
Meanwhile, exports of domestic car brands to the US decreased 9.5 percent last year despite the newly established tariff-free benefits of the KORUS-FTA. This is the first time imports of Korean cars to the US have decreased in seven years, since the global financial crisis in 2009.
Despite Hyundai Motor selling roughly 1.42 million units last year -- its highest ever -- the company’s increasing investment in its US production facilities has been cited as one of the biggest factors in the slump in Korean automobiles being exported to the US.
By Julie Jackson (firstname.lastname@example.org