In a remarkable development for South Korea’s automotive export sector, the Incheon Port Authority (IPA) reported a record-breaking export of 166,000 used cars in the first quarter of this year. This figure marks a significant 52% increase from the previous record of 109,000 units during the same period last year. The surge in exports is attributed to several factors, including increased demand in Middle Eastern and Central Asian markets and a strategic shift in shipping methods due to logistical challenges.
The end of the civil war in Syria in December of last year has notably influenced regional demand for used vehicles. Countries such as Jordan, Türkiye, and the United Arab Emirates have seen substantial increases in imports as they seek affordable transportation solutions amid post-conflict reconstruction and economic recovery efforts. Specifically, Jordan experienced an astonishing 274% growth in used car imports, while Türkiye saw a 202% increase. Other countries like Kyrgyzstan, the UAE, and Libya also reported significant rises at 101%, 77%, and 71%, respectively.
A key factor facilitating this export boom has been the dramatic drop in container shipping rates. From a peak of $6,800 for a 20-foot container in 2022, rates have plummeted to approximately $2,100 as of April this year. This reduction has made it more economically viable for exporters to ship used cars via container ships rather than relying solely on car carriers—a necessity given the ongoing shortage of these specialized vessels since 2021.
In response to these logistical challenges, the used car export industry has increasingly turned to container ships. In the first quarter alone, 130,000 used cars were loaded onto container ships at Incheon Port, compared to just 36,000 units on traditional car carriers. This shift underscores the adaptability of exporters in navigating global supply chain disruptions.
The IPA anticipates that this upward trend will continue throughout the year, projecting annual exports to reach between 600,000 and 650,000 units—potentially surpassing the record high of 500,000 units in 2023. This optimism is bolstered by South Korea’s robust automotive industry and its strategic trade relationships with importing countries.
As global economic conditions evolve and shipping logistics adapt to new realities, South Korea’s position as a major player in the international used car market remains strong.
Source: Business Korea