South Korea’s auto exports fell for a second consecutive month last month. The volume of new vehicles exported increased, but used-car exports contracted sharply due to Middle East conflict and tighter regulations in major markets. Domestic sales posted a double-digit decline as the Chuseok holiday travel period and the exhaustion of electric vehicle subsidies coincided, and amid that, Tesla’s Model Y held on to the No. 1 spot in domestic sales.

According to the “September 2026 Automobile Industry Trends” report released on the 19th by South Korea’s Ministry of Trade, Industry and Energy, auto export value last month came to $6.052 billion (approximately 8.1 trillion won), down 5.5% from the same month last year. It was the second straight monthly decline following August. Export volume during the same period rose 4.1% to 237,443 units, so value and volume moved in opposite directions.

By region, the key markets of North America and the European Union (EU) held up. Exports to North America rose 9.2% to $3.072 billion (approximately 4.1 trillion won), and those to the EU rose 15.3% to $1.105 billion (approximately 1.5 trillion won). Looking at the United States alone, exports rose 7.8% to $2.562 billion (approximately 3.4 trillion won). Central and South America ($333 million, up 8.2%), Oceania ($370 million, up 5.3%) and Africa ($62 million, up 35.8%) also showed gains.

In contrast, Asia plunged 60.0% to $329 million (approximately 440 billion won), and the Middle East fell 7.1% to $354 million (approximately 470 billion won). Other Europe also dropped 41.7% to $419 million (approximately 560 billion won). The Ministry of Trade, Industry and Energy cited reduced used-car exports — driven by logistics disruptions from the prolonged Middle East conflict and tighter regulations in major markets — as the backdrop for the overall weak performance.

Eco-friendly vehicles were the lone growth engine. Eco-friendly vehicle exports last month rose 5.9% to $2.893 billion (approximately 3.9 trillion won), accounting for 47.8% of total auto exports. That marked a return to growth just one month after an August decline. Export volume rose 9.2% to 98,803 units, of which hybrids accounted for about 67% at 66,516 units (up 15.0%). Electric vehicles totaled 30,994 units (up 5.8%), plug-in hybrids 1,287 units (down 62.0%) and hydrogen vehicles just 6 units. By value, hybrid exports rose 8.8% to $1.84 billion (approximately 2.5 trillion won), while electric and hydrogen vehicles rose 1.1% to $1.05 billion (approximately 1.4 trillion won).

Auto parts exports fell 7.2% to $1.773 billion (approximately 2.4 trillion won). Cumulative auto exports for January-September this year came to $52.065 billion (approximately 69.4 trillion won), down 3.7% from the same period a year earlier.

CategorySeptember 2026vs. Same Month Last YearAuto export value$6.052 billion-5.5%Export volume237,443 units+4.1%Eco-friendly vehicle export value$2.893 billion+5.9%Domestic sales135,396 units-14.3%Production346,618 units+3.7%Auto parts export value$1.773 billion-7.2%

The domestic market slumped more steeply. Sales last month fell 14.3% to 135,396 units. The Chuseok holiday, which fell in October last year, moved up to September this year, cutting the number of business days by three, and this was compounded by pent-up demand from buyers waiting for new model launches and the exhaustion of electric vehicle subsidies.

Domestic and imported vehicles also diverged. Sales of South Korean-made vehicles fell 19.4% to 99,157 units, while imported vehicles rose 3.9% to 36,239 units. By automaker, Hyundai Motor fell 25.7% to 49,022 units and Kia fell 6.6% to 45,963 units. Renault Korea (down 45.3%) and KG Mobility (down 48.8%) posted far steeper declines.

Among import brands, Tesla and China’s BYD stood out. Tesla sold 12,372 units, up 36.4%, ranking third in sales behind Hyundai Motor and Kia. BYD surged 156.3% to 2,614 units, taking sixth place.

By model, Tesla’s flagship electric vehicle, the Model Y, topped domestic sales with 11,421 units. It was followed by the Grandeur (8,898 units), Avante (7,305 units), Sorento (6,957 units) and Sportage (5,497 units). The Model Y has posted 73,123 units cumulatively for January-September this year, narrowing its gap with No. 1 Sorento (74,933 units) to 1,810 units. The possibility of claiming the annual sales crown cannot be ruled out.

Domestic sales of eco-friendly vehicles totaled 79,665 units, accounting for about 59% of all sales and maintaining a high share. Electric vehicles rose 10.4% to 31,768 units and plug-in hybrids rose 7.0% to 1,303 units, while hybrids fell 11.1% to 46,229 units and hydrogen vehicles plunged 72.4% to 365 units.

Production moved in the opposite direction. Output last month rose 3.7% to 346,618 units. This reflected the recovery of production volume that had been delayed after major automakers concluded wage negotiations, as well as a base effect from last year’s strikes at some companies. By company, GM Korea led the increase with 41,005 units, up 69.1%, while Hyundai Motor (153,741 units, down 0.3%) and Kia (136,586 units, down 0.7%) edged lower. KG Mobility (9,458 units, down 14.1%), Renault Korea (5,434 units, down 18.0%) and Tata Daewoo (394 units, down 39.9%) declined.

A South Korean Ministry of Trade, Industry and Energy official said, “September auto exports declined due to the Middle East conflict and reduced used-car exports stemming from tighter regulations in major markets, even though new vehicle exports rose 4.1% from the same month last year.” The official added, “Domestic sales of eco-friendly vehicles stood at around 80,000 units, accounting for about 59% of total domestic sales and continuing to maintain a high share.” The official also said, “As global competition intensifies with Chinese companies expanding into overseas markets, we plan to actively push forward support measures for the sustained growth of the auto industry.”

The latest figures reveal that South Korea’s auto industry is sending mixed signals across volume and unit prices, and across domestic sales and exports. Export volume rose, but value fell as lower-priced used vehicles dropped out, while the eco-friendly vehicle share approached half, shifting the product mix toward higher value-added segments. Domestically, meanwhile, the clear divergence between weak South Korean-made vehicles and strong imported electric vehicles is expected to weigh on automakers’ domestic lineup strategies. The industry is also watching whether the Model Y takes the annual crown, which would mark the first time an imported electric vehicle has led sales in the South Korean market.