By Ju-min Park
INCHEON, South Korea (Reuters) -From the muddy grounds of a former amusement park on South Korea’s coast, tens of 1000’s of autos are being packed for cargo abroad as booming used automobile exports assist to mitigate the influence of U.S. tariffs on new automobile gross sales.
Soaked in sweat from the outside warmth, staff are loading and strapping automobiles into containers across the clock for cargo from the makeshift amenities at South Korea’s largest used automobile export hub in Incheon, west of Seoul.
“It’s embarrassing for us to say ourselves our enterprise is a star export merchandise,” stated Kevin Seol, a dealer who ships about 100 used automobiles month-to-month. “However the trade retains rising by numbers so I believe we’re contributing to the nationwide exports.”
South Korea’s auto shipments to the U.S. have declined for six consecutive months since President Donald Trump introduced 25% tariffs.
However its world automobile exports have risen for 3 straight months, supported by record-high second-hand automobile gross sales, which accounted for 1 / 4 of the overall auto exports by quantity and 13% by worth, based on commerce ministry and customs information.
South Korea exported $5.5 billion of automobiles in August, up 9% from a 12 months earlier and the best month-to-month whole on file, the commerce ministry stated. Used automobile exports jumped 35% to $711.5 million the identical month, based on the Korea Used Automotive Distribution Analysis Institute.
The used automobile progress is essentially propelled by insatiable demand for older Hyundai and Kia automobiles in Russia and within the Center East and a weaker received, merchants and consultants stated.
“Exports to the U.S. do not account for a lot of our enterprise,” Seol stated. “Demand from different international locations is robust, so the tariffs have not actually harm us.”
TARIFFS COULD RAISE USED CAR PRICES
South Korea exports many of the used automobiles which can be offered to the Center East, Central Asia and Russia, based on authorities information and merchants.
In these markets, Korean automobiles might be extra enticing than these from export rival Japan as a result of they’re designed for driving on the appropriate aspect of the street, whereas Japan drives on the left, merchants stated.
In South Korea’s largest new automobile export market, the U.S., exports have been hobbled by a 25% tariff that continues to be larger than the 15% price for Japanese and European automobiles, although Seoul is in negotiations for a discount.
However whereas U.S. tariffs are a destructive for the brand new automobile market, they might result in additional demand and better costs for used autos, stated Shin Hyun-do, director of the Korea Used Automotive Distribution Analysis Institute.
