The Korea Automotive Journalists Association held its New Year seminar at the Seolgawon annex in Jongno-gu, Seoul on the 18th.
At this seminar, Lee Dong-hun, Executive Director of the Economic Industry Research Center and Head of Automotive Industry Research at Hyundai Motor Group, presented on “Review of the Global Automotive Market in 2022 and Outlook for 2023.”
During his presentation, Lee explained, “Although the impact of COVID-19 has somewhat eased since last year, and the semiconductor supply situation is improving, we can still expect the continued spread of variant viruses this year, along with worsening household debt and economic recession caused by high interest rates and inflation in major countries. “
As a result, he anticipated, “The global automobile industry demand will show a limited recovery of fewer than 80 million units, which means the recovery to pre-COVID 2019 sales levels (86 million units) will be delayed. “
With the Russia-Ukraine war nearing its one year mark, the competition and conflict between the U.S. and China is deepening, and global supply chain reorganization is accelerating due to strategies that maximize national and allied interests, such as the Inflation Reduction Act (IRA) in the U.S., the Indo-Pacific Economic Framework (IPEF), and Europe’s Carbon Border Adjustment Mechanism (CBAM). These are also expected to act as major risk factors leading to intensified interregional conflicts.
This year’s automotive market is expected to exhibit a gradual recovery in supply, but weakened supplier dominance due to demand slowdown from economic recession. Lee noted that five key characteristics will mark the market: resolution of supply constraints, declining profitability of automakers, expansion of Chinese automotive manufacturers’ overseas ventures, intensified competition in the battery electric vehicle (BEV) market, and a reevaluation of strategies by automakers.
Regarding the electric vehicle market, it is expected that Chinese companies, which have grown primarily in their domestic market, will actively push into emerging markets in the Asia-Pacific, South America, and Africa, expanding sales centered on electric vehicles and aggressively competing with global automotive manufacturers.
Furthermore, it was predicted that the existing legacy manufacturers, primarily focused on internal combustion engine vehicles, will launch a large number of electric vehicles, gradually reducing the market share of Tesla, the leader in electric vehicles, leading to intensified competition among major players.
Main manufacturers are expected to find it imperative to revise and supplement their strategies for future business this year. Some manufacturers that have been inadequate in responding to the electric vehicle market and managing supply chains are recognizing the need for electrification strategies and supply chain reorganization. Other global leading companies are also expected to reevaluate their next-generation dedicated electric vehicle platforms, autonomous driving technology development, and investment strategies to seek ways to enhance future competitiveness.
Lee Sang-jin daedusj@aurodiary.kr