[Report] "How Can We Survive When the Government Is Flooding Subsidies?" Tears at Auto Repair Shops Amid the Electric Vehicle Boom

3306 Seoul Auto Repair Shops in 2022... Decreasing Annually
Electric Vehicles Nationwide Increase Over 500% in 5 Years
Neighborhood Auto Repair Shop Closures Become Visible... "Need to Support Smooth Transition"

"I think they can only last for 3 to 4 years at most."

Choi (56), who runs an auto repair shop in Uiwang-si, Gyeonggi Province, sighed. Choi has been operating the shop in the same place for 22 years. However, in the past two years, five auto repair shops that Choi knows of in the same neighborhood have closed down.

Choi said, "The government is pouring subsidies into electric vehicles, but how can small businesses like ours survive?" He added, "I'm running a severe deficit, and I don't know how much longer I can continue."

The decline in sales at auto repair shops coincided with the expansion of electric vehicle adoption. Customers who used to come for engine oil checks and replacements, the main source of income, have decreased sharply. Additionally, consumables such as fuel filters and spark plugs, which need to be replaced based on mileage, have disappeared.

An individual auto repair shop owner said, "Electric vehicles don't require engine oil changes, and there are fewer consumables, so there's hardly any reason for customers to visit repair shops. In the past, we used to get 7 to 8 cars a day, but nowadays, there are many days when I don't even touch a wrench before going home."

Electric vehicle charging. Photo by Hyunmin Kim kimhyun81@

As more people purchase electric vehicles due to various government subsidy policies, small local auto repair shops nationwide are taking a direct hit. Unlike large corporate franchise stores, the number of small neighborhood repair shops is noticeably decreasing, raising calls for measures to help them adapt to these changes.

According to Seoul City, the number of automobile repair shops in the Seoul area has been decreasing annually. The number of repair shops dropped from 3,590 in 2019 to 3,306 in 2022. Meanwhile, the nationwide supply of electric vehicles increased from about 89,000 units in 2019 to approximately 134,000 units in 2020, and by February this year, it reached about 547,000 units, an increase of over 514% in five years.

The impact is first felt by small-scale and vulnerable neighborhood repair shops. In some areas, 3 to 4 repair shops per alley have already disappeared, making the damage visible. Professor Kim Pil-su of Daelim University’s Department of Automotive Studies said, "With the transition to future vehicles, it is expected that about 30,000 out of 40,000 repair shops nationwide will disappear," adding, "Ultimately, only about 30% of repair shops across the country will remain."

According to a recent report published by the Korea Automotive Technology Institute, if the proportion of electric vehicles in Korea reaches 33% by 2030, about 900 domestic parts companies will decrease, and 35,000 workers will lose their jobs. Experts point out that while it is impossible to resist the changing times, some support is necessary to minimize the damage to those affected by the shift.

Professor Kim said, "In the long term, the disappearance of auto repair shops is inevitable," but added, "However, the government should help ensure that the changing times lead to a 'soft landing' rather than a 'hard landing.' This means some support is needed to help repair shops naturally adapt to the flow." He continued, "There are almost no institutions in Korea that provide education on future vehicle maintenance technology. Recognizing and addressing this gap would be helpful."