Small Cars - South Korea

South Korea

Highlights

Revenue in the Small Cars market is projected to reach US$4bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of -0.46%, resulting in a projected market volume of US$4bn by 2029.
Small Cars market unit sales are expected to reach 277.7k vehicles in 2029.
The volume weighted average price of Small Cars market in 2024 is expected to amount to US$15k.
From an international perspective it is shown that the most revenue will be generated China (US$13bn in 2024).

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Small Cars market in South Korea has been experiencing steady growth in recent years. Customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors all contribute to this development.

Customer preferences in South Korea have played a significant role in the growth of the Small Cars market. South Korean consumers tend to prioritize fuel efficiency, compact size, and affordability when choosing a car. Small cars, also known as compact cars, meet these preferences by offering good fuel economy, easy maneuverability in congested urban areas, and lower price points compared to larger vehicles.

Additionally, the younger generation in South Korea, who are increasingly becoming car owners, also prefer small cars due to their practicality and lower maintenance costs. Trends in the market further support the growth of the Small Cars segment in South Korea. The rise of ride-sharing services and the increasing popularity of urban living have led to a higher demand for compact and fuel-efficient vehicles.

Small cars are well-suited for navigating crowded city streets and are more economical in terms of fuel consumption, making them an attractive choice for urban dwellers. Additionally, the development of electric and hybrid small cars has also contributed to the market growth, as eco-friendly options are becoming more appealing to environmentally conscious consumers. Local special circumstances in South Korea have also influenced the Small Cars market.

The government has implemented various policies and incentives to promote the adoption of small and eco-friendly vehicles. These include tax benefits, subsidies, and preferential parking for compact cars. The government's focus on reducing greenhouse gas emissions and improving air quality has created a favorable environment for the growth of the Small Cars market.

Underlying macroeconomic factors have also contributed to the development of the Small Cars market in South Korea. The country's strong economic growth and rising disposable incomes have increased the purchasing power of consumers, making car ownership more accessible. Additionally, the high population density and limited space in urban areas make small cars a practical choice for many South Koreans.

In conclusion, the Small Cars market in South Korea is experiencing growth due to customer preferences for fuel efficiency and affordability, market trends favoring compact and eco-friendly vehicles, local special circumstances such as government incentives, and underlying macroeconomic factors such as rising disposable incomes. These factors combined create a favorable environment for the Small Cars market to thrive in South Korea.

Data coverage:

The data encompasses B2C enterprises. Figures are based on the sales of new passenger cars. Data on the specifications of the sold vehicles is based on the base models of the respective makes.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use company reports and websites, vehicle registries, car dealers, and environment agencies among other sources. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and car stock per capita. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, we use the ARIMA model for the Passenger Cars market. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:

The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice a year. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).