Record-breaking Exports in August Boost Trade Balance and Economic Rebound
Exports surge to $5.3 billion in August, setting a historic milestone
The month of August witnessed an extraordinary achievement in South Korea’s export sector, with exports soaring to an all-time high of $5.3 billion. This remarkable feat marks the highest record for any August in history. Such a momentous milestone is expected to have a profound impact on improving the country’s trade balance and initiating an economic rebound in the second half of the year.
Unprecedented Growth in Electric Vehicle Sales
Adding to the success story is the surge in electric vehicle sales, which has witnessed a continuous increase for nine consecutive months. The sustained growth in this eco-friendly segment of the automotive industry has led to electric vehicles accounting for one-third of the total exports. In particular, August recorded a staggering 61% growth rate in electric vehicle exports, solidifying its position as the driving force behind overall exports.
This remarkable achievement can be attributed to various factors, such as the normalization of the supply of crucial automotive parts, including automotive semiconductors. Additionally, effective collaboration between public and private entities played a pivotal role in timely addressing trade-related issues.
Influence of the US Inflation Reduction Act (IRA)
The Ministry of Trade, Industry, and Energy has actively implemented the US Inflation Reduction Act, yielding significant benefits for the Korean car industry. This proactive approach resulted in the provision of subsidies for eco-commercial vehicles in the United States, thereby boosting sales. Regardless of battery requirements, eco-friendly vehicles now qualify for subsidies of up to $7,500, incentivizing the expansion of eco-friendly vehicle sales in the US market.
The success of this strategy is evident in the remarkable growth of IRA-eligible eco-friendly vehicle sales, which have experienced a consistent upward trend for nine consecutive months. August witnessed an extraordinary performance, with sales surpassing 14,000 units, marking a 153% increase compared to the same month in 2022 when the IRA was implemented. Furthermore, market share has also surpassed 10% for two consecutive months, demonstrating the effectiveness of this initiative.
Domestic Car Production Hits 10-Year High
Notably, domestic car production achieved a significant milestone in August, surpassing 300,000 units for the first time in a decade. This resurgence in production is a testament to the resilience and competitiveness of the Korean automobile industry.
Despite these notable achievements in the export sector and domestic car production, the domestic market posed some challenges, with imported car sales experiencing an 11% decline in August. Nonetheless, overall domestic car sales registered a modest 2% increase, resulting in a total of 130,000 units sold.
Positive Outlook for Trade Balance and Economic Recovery
The extraordinary performance witnessed in August, with record-breaking exports and substantial growth in eco-friendly vehicle sales, bodes well for the second half of the year. These achievements are expected to have a positive impact on improving the trade balance and fostering an economic recovery.
As South Korea’s automotive industry continues to surpass expectations and break barriers, the future appears promising. The sector’s unwavering commitment to innovation, collaboration, and sustainability sets a shining example for the global automotive market.
# Automobile exports #environmentally friendly cars #inflation reduction law
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Exports this August reached $5.3 billion, the highest record for any August in history.
US IRA law in effect for 1 year, US electric vehicle sales increase for 9 months in a row
Domestic car production exceeded 300,000 units in August for the first time in 10 years.
Expect positive effects on improving trade balance and economic rebound in the second half of the year
▲ Finished vehicles awaiting export
Automobile Korea exports have been on track for 14 consecutive months from July last year to August this year, recording a double-digit increase compared to the same month last year.
In particular, it was assessed that it contributes to improving the national trade balance and economic rebound in the second half of the year by continuing to achieve the highest level of export performance ever despite difficult conditions such as high global and high interest rates. inflation.
According to the Ministry of Trade, Industry and Energy, car exports in August this year reached $5.3 billion, the highest ever in August, and thanks to such robust exports, domestic car production in August this year reached its highest level in August for the first time. in 10 years since August 2013. It turned out to be over 300,000 units.
In addition, electric vehicle exports recorded a high growth rate of 61%, leading overall exports, and eco-friendly vehicles, including electric vehicles, accounted for one-third of total exports.
This is believed to be due to normalization of the supply of parts such as automotive semiconductors and timely response to trade issues through public-private collaboration.
Meanwhile, the Ministry of Trade, Industry and Energy has responded actively to enforce the US Inflation Reduction Act (IRA), and in December last year, as our views were finally reflected on paying subsidies for eco-commercial. friendly vehicles in the United States, North American assembly and Regardless of battery requirements, you can now receive up to $7,500 in subsidies.
The Korean car industry took advantage of this to expand the sales of commercial eco-friendly vehicles in the US market (about 5% in 2022 → 55% in August 2023), and as a result, contrary to initial concerns, our industry’s eco-friendly vehicles expanded (electricity, hydrogen, plug-in) that qualify for an IRA. Hybrid sales) show the highest level of sales ever in the US market.
Sales of IRA-eligible eco-friendly vehicles have been increasing for 9 consecutive months from December last year to August this year, and in particular, August’s performance broke a record high of 14,000 units, an increase by 153% compared to August. 2022 when the IRA came into force.
In addition, market share also increased, surpassing 10% for two consecutive months.
Meanwhile, in the domestic market in August, domestic car sales increased by 2%, but imported cars fell by 11%, resulting in total sales of 130,000 units, a decrease of 0.7% compared to August last year.
# Automobile exports #environmentally friendly cars #inflation reduction law
Copyright@ KWANGJU BROADCASTING COMPANY. all rights reserved.
#Korean #car #exports #flying.. #Doubledigit #growth #consecutive #months
