South Korean Auto Exports To Hit Record High

Market will hit $43.3 billion.

Exports of South Korean cars and parts will hit a record high of $43.3 billion this year due to improved quality and brand recognition, a government report said last week.

Exports of cars are expected to reach 2.7 million units worth $33 billion, up 11.9% from a year ago, the Ministry of Commerce, Industry and Energy said in a report. Exports of car parts will jump 21.2% to $10.3 billion.

The ministry predicted the trade surplus in the auto sector would rise to $37.3 billion this year from $33.2 billion a year ago.

The good performance was the result of efforts by South Korean carmakers to upgrade quality and build up competitiveness through increased production abroad, it said.

Domestic car sales are predicted to stay at last year's level of 1.15 million units due to high fuel prices and sluggish demand,.

Because of strikes, total domestic and overseas production is forecast to rise a modest 3.3% year-on-year to 3.82 million units by the end of this year, short of the government's earlier projection of four million, the ministry said. Of the total, overseas production is projected to top one million units this year and 1.25 million next year. Local carmakers are expanding production abroad to ride out the won's rise against the dollar, which makes South Korean products expensive abroad.

Copyright Agence France-Presse, 2006

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