As per MRFR analysis, the South Korea Automotive Industry Report Market Size was estimated at 228.75 (USD Billion) in 2023. The South Korea Automotive Industry Report Market Industry is expected to grow from 244.54 (USD Billion) in 2024 to 580 (USD Billion) by 2035. The South Korea Automotive Industry Report Market CAGR (growth rate) is expected to be around 8.168% during the forecast period (2025 - 2035).
The South Korea automotive industry is experiencing significant shifts driven by technological advancements, environmental regulations, and changing consumer preferences. The key market drivers include a strong focus on electric vehicles (EVs) as the government aims to reduce carbon emissions and promote sustainable energy usage. This transition is supported by various initiatives, such as subsidies for EV purchases and investment in charging infrastructure, highlighting the government's commitment to a greener future. Additionally, South Korea's robust manufacturing capabilities position it well for innovation in smart vehicle technology, including autonomous driving and connectivity features.
Consumers are increasingly choosing electric and hybrid vehicles, pinpointing a greater concern and awareness for the environment. These changes encourage business growth, especially in cities where pollution is a primary concern. The South Korean automotive industry is also adjusting to new trends with the increasing use of intelligent and Internet-of-Things (IoT)-)-enabled devices like Advanced Driver-Assisted Systems (ADAS). South Korea has a notable digital proficiency, which makes adding innovative technologies to vehicles highly marketable. There is room to strengthen the local value chain to lessen the dependency on foreign parts such as batteries and semiconductors, which would allow faster production and higher profits.
Local manufacturers can potentially explore collaboration with tech firms to innovate in vehicle automation and connectivity. The combination of strong government support, consumer willingness to embrace new technologies, and an investment-friendly environment positions South Korea's automotive sector for robust growth in the coming years. Through these developments, South Korea is shaping its automotive industry to meet future challenges while catering to changing consumer dynamics.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The transition toward electric vehicles (EVs) is a significant driver in the South Korea Automotive Industry Report Market Industry. With the South Korean government aiming to have 1.13 million electric vehicles on the road by 2025, an increase from around 200,000 in 2020, there is a strong push for the infrastructure required to support this transition as well. In 2022, the Ministry of Environment implemented the Green Vehicle Certification System to promote EV usage, leading to an increase in investments in Research and Development (R) from established automotive companies such as Hyundai Motor Company and Kia Corporation.
The commitment from these organizations, along with government incentives, is expected to increase the market share of electric vehicles significantly, further validating South Korea's pivotal role in the global electric vehicle market. This transition is expected to contribute substantially to the overall growth of the South Korea Automotive Industry Report Market Industry.
The development of autonomous vehicle technology is poised to be a major growth driver in the South Korea Automotive Industry Report Market Industry. South Korea has set ambitious goals to commercialize Level 4 autonomous vehicles by 2027, supported by policies from the government aimed at establishing a test bed for autonomous vehicles across the nation. Major automakers such as Samsung's Hyundai division and various tech companies are investing heavily in Research and Development, with the government allocating substantial resources towards the initiative.
Reports suggest that by 2030, South Korea could generate an additional USD 50 billion in economic activity attributed to advancements in this sector, highlighting the potential for increased market growth.
In response to climate change and environmental concerns, there is a growing focus on sustainability in the South Korea Automotive Industry Report Market Industry. The South Korean government has proposed the 'Green New Deal,' which includes measures to promote eco-friendly automobiles as part of its broader policy framework. With approximately 70% of the population expressing support for greener transport solutions in recent surveys, automakers such as Hyundai and Kia are aligning their Research and Development initiatives with sustainable practices, focusing on hydrogen fuel cell technologies and renewable energy sources.
This eco-conscious approach is expected to foster a positive environment for market growth, contributing to a more significant share of the global automotive market.
Rapid urbanization in South Korea is creating an increased demand for innovative mobility solutions, driving growth in the South Korea Automotive Industry Report Market Industry. Reports indicate that more than 80% of the South Korean population now resides in urban areas, leading to a heightened demand for smart transportation systems. The government's initiative to enhance public transportation and integrate more advanced vehicle technologies presents an opportunity for automakers to capitalize on this demand.
Companies like SK Telecom are spearheading various smart city projects to improve transportation efficiency, therefore necessitating newer automotive technologies. This urbanization trend is indicative of a shift in consumer preferences and is expected to significantly contribute to the growth of the automotive market.
The Vehicle Type segment within the South Korea Automotive Industry Report Market reveals a diverse and dynamic landscape shaped by consumer preferences and technological advancements. The South Korean market is notably characterized by the popularity of passenger cars, including hatchbacks and sedans, which cater to urban dwellers seeking compact and efficient transportation solutions. Sport Utility Vehicles (SUVs) and Multi Utility Vehicles (MUVs) have also gained significant traction, appealing to families and individuals looking for versatility and comfort. The growing trend towards larger vehicles reflects changing lifestyles and the desire for enhanced safety and utility in transportation.
Commercial vehicles, including Light Commercial Vehicles (LCVs) and heavy trucks, continue to play a critical role in supporting South Korea's robust logistics and transportation sectors. These vehicles are essential for the movement of goods and are experiencing shifts towards electric and hybrid models due to environmental regulations and sustainability efforts. Buses and coaches are also prominent in South Korea, particularly given the government's focus on promoting public transportation to alleviate urban congestion and reduce emissions. As such, there is a notable market movement towards greener technologies across the Vehicle Type segment, aligning with national initiatives aimed at fostering environmentally friendly transportation solutions.
Further segment analysis shows that consumer preference is evolving toward vehicles equipped with advanced technologies that enhance safety, connectivity, and fuel efficiency. This shift creates opportunities for manufacturers to innovate and differentiate themselves in a competitive landscape. The South Korean Automotive Industry Report Market is adapting to these demands by investing in Research and Development (R) to incorporate features such as autonomous driving capabilities and smart technology integration across various vehicle types.
Overall, the Vehicle Type segment within the South Korea Automotive Industry Report Market illustrates a landscape marked by growth and innovation driven by changing consumer needs, technological evolution, and regulatory frameworks that are pushing the industry towards sustainability and efficiency. Thus, understanding the nuances of this segment is essential for stakeholders aiming to capitalize on the emerging trends shaping the automotive industry in South Korea.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The Propulsion Type segment within the South Korea Automotive Industry Report Market is characterized by a notable cleavage between internal combustion engine (ICE) vehicles and electric vehicles (EVs). The South Korean automotive landscape has seen a significant pivot toward electric mobility, driven by government incentives aimed at promoting sustainable transport solutions. The growing concern over air pollution and carbon emissions has propelled the demand for cleaner vehicle alternatives, thereby increasing the market share of electric vehicles.
Additionally, the South Korean government has outlined ambitious targets for EV adoption, aligning with the global shift toward electrification. This region boasts a robust infrastructure for electric vehicles, including widespread charging stations that support the transition from ICE vehicles to EVs. While ICE vehicles have historically dominated this segment, the shift towards electric mobility is anticipated to redefine the competitive landscape. The South Korea Automotive Industry Report Market data suggests an increasing consumer preference for environmentally friendly vehicles, thereby positioning electric vehicles as a crucial component in the industry's future trajectory.
Overall, the growing emphasis on sustainability and technological advancements presents numerous opportunities for growth within this segment, highlighting its significance in shaping the South Korea Automotive Industry Report Market statistics.
The competitive landscape of the South Korea Automotive Industry Report Market is characterized by a robust and dynamic environment driven by rapid technological advancements, changing consumer preferences, and increasing emphasis on sustainability. South Korea stands as a significant automotive hub in Asia, showcasing a mix of domestic and international players competing for market share. Companies are continuously innovating and enhancing their product offerings to adapt to the evolving market demands, particularly in electric and hybrid vehicles. Additionally, strategic alliances, partnerships, and investments in research and development further contribute to the competitiveness of the automotive industry. The active government policies promoting electric mobility and improving infrastructure also play a crucial role in shaping the competitive dynamics within this market.
Mercedes-Benz Korea has established a strong presence in the South Korean automotive landscape, holding a reputation for luxury vehicles and innovative technology. The company's collaboration with local dealers and focus on customer-centric services has further solidified its market position. Mercedes-Benz Korea capitalizes on the premium segment by offering a diverse portfolio of vehicles that appeal to affluent consumers looking for quality, performance, and brand prestige. The strategic marketing initiatives and localized customer support have proven advantageous, allowing Mercedes-Benz Korea to differentiate itself from competitors. Furthermore, its investment in sustainability and electric offerings aligns well with the increasing consumer interest in eco-friendly vehicles, contributing to its strengths within the market.
Hyundai Motor Company serves as a cornerstone of the South Korean automotive sector, exemplifying innovation and mass-market appeal. With a strong lineup of vehicles ranging from compact cars to SUVs and electric models, Hyundai has significantly influenced consumer preferences in the region. The company maintains a vast network of dealerships, ensuring extensive market presence and customer access. Hyundai’s commitment to research and development fosters continuous improvement in vehicle technology, such as advanced safety features and connectivity options. Moreover, the company's efforts in mergers and acquisitions, including partnerships with technology firms, enhance its competitive edge and facilitate its entry into new market segments. With a focus on sustainability, Hyundai is actively expanding its electric vehicle offerings, appealing to environmentally-conscious consumers. The brand's established identity as a reliable, affordable, and innovative automaker reinforces its strength within the South Korean automotive market.
Recent developments in the South Korea Automotive Industry Report Market indicate a growing focus on innovation and sustainability. Significant growth has been recorded by major players such as Hyundai Motor Company and Kia Corporation, reflecting an increasing market valuation driven by a surge in electric vehicle (EV) adoption. Mercedes-Benz Korea and BMW Korea are intensifying their investments in EV technology, aiming to capture a larger share of the market.
Meanwhile, in terms of acquisitions, it was noted in July 2023 that Renault Samsung Motors entered into a strategic partnership with LG Chem to co-develop battery technologies for future EVs, enhancing their competitive stance in the growing electric sector. In the past two to three years, the automotive market has evolved rapidly with a heightened focus on autonomous driving technology, as evidenced by GM Korea's partnerships in RD initiatives aimed at self-driving cars. The South Korean government continues to support the automotive industry with numerous incentives for carbon-neutral vehicles, making it a favorable environment for both local and international manufacturers. Notably, Ford Korea is also strategizing on expanding its presence in the electric segment to meet rising domestic demand.
| Report Attribute/Metric | Details |
| Market Size 2023 | 228.75 (USD Billion) |
| Market Size 2024 | 244.54 (USD Billion) |
| Market Size 2035 | 580.0 (USD Billion) |
| Compound Annual Growth Rate (CAGR) | 8.168% (2025 - 2035) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year | 2024 |
| Market Forecast Period | 2025 - 2035 |
| Historical Data | 2019 - 2024 |
| Market Forecast Units | USD Billion |
| Key Companies Profiled | Mercedes-Benz Korea, Hyundai Motor Company, Toyota Motor Korea, BMW Korea, Daewoo Commercial Vehicle, Renault Samsung Motors, Nissan Korea, LG Chem, Ford Korea, SsangYong Motor, Honda Korea, GM Korea, Skoda Auto, Samsung SDI, Kia Corporation |
| Segments Covered | Vehicle Type, Propulsion Type |
| Key Market Opportunities | Electric vehicle adoption growth, Advanced driver-assistance systems, Increased demand for eco-friendly vehicles, Rising automotive technology investments, Expansion of mobility-as-a-service solutions |
| Key Market Dynamics | Electric vehicle adoption growth, Government regulations and incentives, Consumer preference for sustainability, Competitive global market trends, Advanced manufacturing technologies integration |
| Countries Covered | South Korea |
Frequently Asked Questions (FAQ) :
The South Korea Automotive Industry Report Market is expected to be valued at 244.54 USD Billion in 2024.
In 2035, the market is projected to reach a valuation of 580.0 USD Billion.
The expected CAGR for the South Korea Automotive Industry Report Market is 8.168 % from 2025 to 2035.
Major players include Hyundai Motor Company, MercedesBenz Korea, and Toyota Motor Korea among others.
The projected market size for passenger cars is valued at 98.0 USD Billion in 2024.
The SUV segment is expected to grow to 130.0 USD Billion in 2035.
The hatchback segment is anticipated to reach a value of 70.0 USD Billion in 2035.
Challenges include emerging competition and regulatory changes impacting market dynamics.
Growth opportunities exist in electric vehicles and smart car technology advancements.
The market size for sedans is valued at 40.0 USD Billion in 2024.
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