The warning light has come on for the local automobile industry. Mexico overtook Korea in terms of automobile production amid Korea’s stumbling domestic consumption and export performance coupled with the so-called “GM shock.”
The number of cars manufactured in Korea in January and February this year fell by 5.5 percent to 599,346 compared to the same period of last year, the Korea Automobile Manufacturers Association said Monday. On the other hand, the number of cars manufactured for the first two months in Mexico stood at 632,107 units, outnumbering that of Korea. Mexico stood behind Korea in the list of top global auto makers by production, ranking at seventh, but it surpassed Korea by 32,761 units this year.
Korea produced more cars than Mexico at about 628,000 units in 2016 and the gap closed to 46,000 units last year. This year, Mexico ranked at sixth in the list, overtaking Korea in two months. The domestic consumption for local cars in January and February of this year decreased by 3.7 percent, compared to the same period of last year. The key reason behind the fall was a sharp drop in the sales of GM Korea by 40.3 percent after it announced that it is closing its factory in Gunsan, intensifying the rumors of GM’s supposed pull-out from South Korea.
Korea was the only country among the top 10 global auto makers, which had lower production volume year-on-year in 2016 and 2017, two years in a row. “Korea might fall down the list of top global automakers if it does not improve its chronic structure of low efficiency and high expenditure, thereby failing to receive investment from domestic and foreign companies,” said Kim Yong-geun, chairman of the Korea Automobile Manufacturers Association.
Woo-Shin Han email@example.com