Industry forecasts say solid domestic auto demand in the second half will continue, pushing annual sales above 1.7 million for the first time in three years. Exports are expected to slow somewhat on high inflation and interest rate hikes in major countries and the shift of some models to local production.
On the 26th, the Korea Automobile & Mobility Association (KAMA) recently analyzed first-half results and second-half outlooks for domestic demand, exports, and production in its "Second-half 2026 automotive industry outlook."
First-half domestic sales rose 1.3% on-year to 851,000 units. A surge in electric vehicle sales and increased deliveries ahead of the end of the special consumption tax cut lifted sales.
In particular, electric vehicles jumped 113.6% from a year earlier to 198,509 units. The EV share rose from 11.1% last year to 23.3% this year.
Adding hybrids (HEVs) and fuel cell electric vehicles (FCEVs), total eco-friendly vehicle sales reached 491,498, up 27.1% from last year. The eco-friendly share rose from 46.1% to 57.8%.
However, sales of domestic brands lagged imports. Domestic brands fell 4.8% to 658,000 units due to supply disruptions from a parts maker fire and pent-up demand for new models. Imports, by contrast, climbed 30% to 193,000 units on the strength of EV brands such as Tesla and BYD.
KAMA expects domestic growth to accelerate in the second half. It projects second-half sales will rise 2.7% on-year to 865,000 units, bringing the annual total to 1.71 million. Domestic sales topping 1.7 million would be the first time in three years, after 2023 (1.75 million).
KAMA said eco-friendly vehicles should keep growing in the second half, with new model effects expected from Hyundai Motor Tucson, Avante, and Santa Fe, and Genesis hybrid models. It also cited the expanded entry of Chinese EV brands such as Leapmotor and Zeekr into the domestic market as a factor that could enlarge the eco-friendly segment.
First-half exports rose 2.1% to 1,441,000 units. The share of eco-friendly vehicle exports increased from 30.0% last year to 37.0%. HEV exports totaled 379,000, up 28.5% from a year ago, helped by lineup expansions including the Staria and Grand Koleos.
EV exports increased 20.6% to 155,000 units, led by new models such as Kia EV3, EV4, and EV5, and the purpose-built mobility (PBV) PV5.
In the second half, exports are projected to slip 0.3% on-year to 1.32 million units due to the effects of high inflation and interest rate hikes in major countries. The annual outlook is 2.76 million units, up 0.9%.
An industry official said, "In the domestic market, the direction of labor-management talks at corporations, the government's tax policy, and the depletion of EV subsidies are variables, while in exports, global protectionism and the expansion of Chinese companies are cited as factors."