SOUTH KOREA DATA: Oct vehicle output falls for 2nd month on chip shortage

South Korea manufactured 263,723 vehicles in October, down 21.6% year on year, but up 15% from September, data from the Ministry of Trade, Industry and Energy showed Nov. 18.

October's output marked a second straight annual decline, mostly due to a prolonged global supply shortage of automotive semiconductor chips.

Vehicle exports posted an annual decline for a second straight month in October, falling 18.1% to 159,520 vehicles.

The ministry said the chip shortage was expected to ease in the third quarter but was delayed because of supply chain disruptions in Southeast Asia, especially Malaysia.

Nevertheless, exports of eco-friendly vehicles set a new all-time high of 38,638 units in October, up 10.3% from September and surging 32.9% versus October 2020.

The October increase brought exports of green vehicles for the first 10 months of 2021 to 317,602 units, up 41.5% year on year. Hybrid electric vehicles made up 169,293 units of the 10-month exports, up 64.9% from the previous year, followed by electric vehicles at 116,794 units, up 17.7% year on year.

Vehicle production stood at 2.84 million units over January-October, 1.6% higher year on year.

The chip shortage is likely to affect the annual projections of South Korean vehicle makers. On Oct. 26, Hyundai Motor revised its 2021 sales target down to 4 million vehicles from 4.16 million units.

Germany's Continental projected Nov. 10 that the global semiconductor shortage likely peaked in Q3, though automotive production will continue to be hurt by shortages throughout 2022.

S&P Global Platts Analytics expects chip supplies to stabilize in Q2 2022 and production to meet projected demand in early 2023.