Automobile Industry Association: "Domestic Sales of Chinese Electric Commercial Vehicles Up 749%"

Analysis of New Vehicle Registrations in the First Half of the Year
Chinese-made Electric Buses Account for 49% Market Share

[Asia Economy Reporter Sung Ki-ho] In the first half of this year, sales of Chinese-made electric commercial vehicles (buses and trucks) surged in the domestic automobile market. In particular, Chinese-made electric buses accounted for nearly half of the market share.

According to the 2022 first half new vehicle registration status analysis report released by the Korea Automobile Manufacturers Association (KAMA) on the 15th, 1,351 Chinese-made electric commercial vehicles (buses and trucks) were sold domestically from January to June this year, a staggering 749% increase compared to the same period last year (159 units). The market share of Chinese-made electric commercial vehicles in the domestic market rose sharply from 1.1% last year to 6.8% this year. Especially, Chinese-made electric buses sold 436 units in the first half of this year, showing a market share close to half at 48.7%.

KAMA cited affordable prices, a variety of models, and non-discriminatory subsidies as the reasons behind the rapid growth of Chinese-made electric commercial vehicles. In the first half of this year, the number of electric bus models launched was 9 for domestic brands, but as many as 20 for imported brands.

Electric trucks still have a domestic market share of 95.2%. However, Chinese-made small trucks, priced about 10 million KRW cheaper than domestic models, sold 915 units in the first half of this year, an 8,218% increase compared to 11 units in the same period last year.

Total domestic automobile sales in the first half of this year were 818,000 units, down 11.4% from 924,000 units in the same period last year. This is the lowest sales volume since 2014.

Demand concentrated on high-priced vehicles such as electric cars and sport utility vehicles (SUVs), raising the average selling price from 39 million KRW to 42 million KRW, a 9.3% increase. The average selling price of domestic cars rose from 32.3 million KRW to 35.1 million KRW, and imported cars from 69.8 million KRW to 78.3 million KRW, up 8.6% and 12.2% respectively compared to the same period last year.

The market share of imported cars by volume decreased from 18.1% in the first half of last year to 17.7% this year. However, sales of imported cars priced over 100 million KRW increased by 11.2%, from 27,892 units in the first half of last year to 30,123 units this year, pushing the market share by value of imported cars up slightly from 32.4% last year to 32.6% this year, marking a record high.

Electric-powered vehicles, including hybrids, increased by 34.1% compared to the same period last year, recording a market share of 25.8%. The market share was 17.0% in the first half of last year.

The market share of electric vehicles rose to 8.4% in the first half of this year, about twice the 4.3% in the same period last year.

By nationality of imported cars, Chinese-made vehicles were the only ones to increase sales compared to the same period last year (125.3%) due to the surge in electric vehicle sales. German-made cars decreased by 2.9%, and American-made cars fell by 22.6% due to a sharp drop in Tesla sales. Additionally, KAMA pointed out characteristics of the domestic automobile market in the first half of this year, including a 15.5% increase in mid-size SUVs, where new electric vehicle launches were concentrated, and a 1.1% increase in corporate and business purchases focused on rental businesses due to a rise in short-term rental demand.

Regarding the sharp increase in the market share of Chinese-made electric commercial vehicles, KAMA Chairman Jung Manki said, "While maintaining the principle of non-discrimination between imported and domestic products, it is necessary to consider corresponding measures against some countries like China that discriminate between domestic and foreign products." He added, "Recently, the U.S. Congress passed the 'Inflation Reduction Act,' which grants tax benefits only to North American electric vehicles. We will continuously request non-discriminatory treatment for Korean products under the national treatment principle of the Korea-U.S. Free Trade Agreement (FTA), but if necessary, we should also consider applying the principle of reciprocity, even temporarily."

Chairman Jung also said, "Considering the complex crisis, there are concerns about a future contraction in consumer sentiment due to interest rate hikes and weakened consumer purchasing power. The government should prepare measures to stimulate domestic demand, such as support for replacing old vehicles."