Exports Also 'Clear'... Domestic Market Expected to Remain Steady
[Asia Economy Reporter Yu Je-hoon] Next year, the global automobile market is expected to show a steady growth rate in the 5% range, while the domestic market is projected to remain flat due to the ongoing impact of semiconductor supply shortages. In particular, global automakers that have collectively declared this year as the 'first year of electrification' are predicted to intensify competition in eco-friendly vehicles by launching various new electric models starting early next year.
According to automotive analysis firm LMC Automotive on the 31st, global vehicle sales next year are expected to reach approximately 88.646 million units, a 5.3% increase compared to this year's estimates. This is due to the prolonged COVID-19 pandemic prompting countries to competitively implement economic stimulus measures, along with expanded support for eco-friendly vehicles centered around the United States and the European Union (EU), which is driving demand.
Accordingly, the domestic automobile industry is also expected to face a favorable business environment next year. Exports are forecasted to continue their upward trend. The Korea Automobile Manufacturers Association (KAMA) anticipates that next year's vehicle exports will increase by 6.3% from this year to about 2.18 million units.
However, unlike the export market, the domestic market is expected to remain flat. The overall domestic market is projected to increase by 0.3% to 1.74 million units, similar to this year's level, while sales of domestically produced vehicles excluding imports are expected to decline by 0.7% to around 1.42 million units. This is due to the continued semiconductor supply shortage likely causing production disruptions, as well as adverse factors on both demand and supply sides, such as the end of the individual consumption tax reduction policy after July next year.
Meanwhile, the biggest battleground in the global automobile market next year is expected to be the eco-friendly vehicle market, particularly the electric vehicle market. With major automakers unveiling electrification plans this year, intense new model competition is set to begin next year. Market research firm SNE Research forecasts that the global electric vehicle (EV, PHEV) market will grow to 8.5 million units next year, accounting for 10% of the total automobile market.
Domestically, despite the overall market remaining flat, the eco-friendly vehicle market is expected to continue its growth trend. In fact, the cumulative sales growth rate of eco-friendly vehicles from January to November reached 41.3%, far surpassing the overall domestic market performance (-11.3%). Accordingly, the domestic automobile industry plans to significantly strengthen its eco-friendly vehicle lineup next year. Hyundai Motor Company and Kia plan to launch models such as the electrified GV70, Ioniq 6, and the new Niro EV, while the three foreign automakers, which had lagged in the eco-friendly trend, will bolster their lineups by consecutively releasing models like the Bolt EV and EUV, XM3 hybrid model, e-Motion, and J100 (project name).
An industry insider stated, "As consumer sentiment in our companies' major export regions has greatly improved, next year's performance is likely to be better than this year," adding, "Especially, securing a foothold in the rapidly expanding eco-friendly vehicle market is also a strength." Reporter Yu Je-hoon kalamal@
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