BMI's Executive Summary

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South Korea's new vehicle sales are on track to meet the 1.22mn units forecast by BMI for 2007. In October 2007, domestic sales by the five national manufacturers grew by 7.7% y-o-y to 105,841 units. Compared with previous months of the year, October's domestic sales also showed a return to month-onmonth growth. Sales were up by 15.2% from the 91,904 units recorded in October 2006, and recorded the highest monthly sales since the 106,267 units sold in June. For the period January-October 2007, domestic sales stood at 1,001,417 units, up 6.8% from the first 10 months of 2006.

International trade is also restoring the market to health with exports for the year to October running at 8.8% higher than the same period of 2006 at 2.310mn units. Indeed, October's exports were the highest overseas monthly sales of the year so far, rising 38.4% from September. On the other hand, sales by imported brands in South Korea are up by 32% for the 10-month period. This has led BMI to raise its forecast for imported sales to 52,689 units for 2007, representing growth of 30% y-o-y. This would mean imports of over 80,000 units by 2012, accounting for over 5% of total sales.

Despite the healthy outlook for the market, South Korea still ranks mid-table in BMI's Business Environment Ranking for the automotive industry in the Asia Pacific region. While much of this is down to the strong performances of other markets in the region, the country's high level of vehicle ownership also restricts the market's growth potential. The country's CBU output potential also receives a low score as domestic carmakers turn more towards overseas plants than producing for export. Annual disruption to production schedules by strikes resulting from wage negotiations also act against South Korea in terms of its regulatory environment.

Hyundai continues to lead the market among domestic manufacturers, although affiliate Kia is enjoying significant growth to rank a firm second. GM Daewoo, which is becoming a global hub for US carmaker General Motors for certain market segments, follows in third and could pose a serious threat as it continues to post double-digit sales growth. Among imported sales, premium brands are among the most popular, with Lexus leading the imported market for the year to October with a market share of 14%, followed by BMW and Audi on 13.84% and 9.47% respectively. The strongest growth over the 10-moth period came from another luxury brand, Bentley, with sales up from four units in 2006 to 78 in the year to October 2007.

Contents

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Chapter 1 – SWOT Analysis

South Korea Auto Industry SWOT

South Korea Economic SWOT

South Korea Business Environment SWOT

Chapter 2 – Regional Market Overview

Table: Asia Pacific Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Asia Pacific Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Ranking

Table: Asia Pacific Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: South Korea Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: South Korea Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: South Korea Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: GDP, Output & Population

Country Snapshot: South Korea Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 – Competitive Landscape

Market Overview

Table: South Korea Vehicle Production

Domestic Manufacturers

Table: Sales By Domestic Manufacturers 2005*

Record Month

Imported Brands

Table: South Korea Imported Vehicle Sales 2005

Table: South Korea Imported Luxury Vehicle Sales Jan-Aug 2006

Chapter 7 – Company Monitor

General Motors Asia Pacific Regional Overview

Table: GM Asia Vehicle Production 2005 (CBUs)

Table: GM Asia Vehicle Sales 2005 (CBUs)

Profiles

Hyundai Motor Corp

Kia

GM Daewoo

Ssangyong Motor

Renault Samsung

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave. per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's Asian Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: