Seoul: There is an "urgent need" for the South Korean government to implement policies that help exporters compete with its neighbors in light of China's booming auto industry, according to the Korea Automobile Manufacturers Association. I am in second place. Exported the car last year.

"The sharp increase in Chinese automobile exports has a negative impact on the expansion of Korean exports," according to the report released on Wednesday.

As Chinese companies increase their exports with government support, competition between Korean and Chinese companies in various local automobile markets is predicted to heat up.

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According to the report, the South Korean government should sign free trade agreements to increase the export competitiveness of Korean automobiles and open up new markets, while also implementing a comprehensive incentive program to attract capital investment into manufacturing facilities.

Kang Nam-hoon, president of the Korea Automobile Manufacturers Association, said incentives were needed to entice both domestic and foreign investment into electric vehicle manufacturing facilities.

Tesla's Shanghai factory produces about half of China's electric vehicle exports, while South Korea has not been able to secure any electric vehicle assembly lines from foreign-owned automakers.

China's automobile exports have grown rapidly since 2021. According to the China Association of Automobile Manufacturers (CAAM), the world's second largest exporter of cars will export 3.1 million vehicles in 2022, a 54% year-on-year increase.

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With exports of 3.2 million vehicles from January to November last year, Japan currently holds the top spot for global auto exports. The country is yet to release its export figures for the full year.

Before 2021, China continued to export about one million cars annually. The figures doubled as a result of an increase in exports of electric vehicles during that year, when China accounted for about 60% of all electric vehicle exports globally.

According to CAAM, China's exports of new energy vehicles grew by 120 percent last year to 680,000 units, accounting for 21.9% of all auto exports.

South Korea places great importance on electric vehicles. The government said earlier this year that eco-friendly vehicles, such as electric, hybrid and hydrogen-powered cars, are the new export engine for the country's auto industry, accounting for 25.1% of the total value of car exports in 2021 .

From January to October last year, South Korea's electric vehicle exports grew 41% year-on-year to 210,000 units, accounting for 11% of all vehicle exports. South Korea's total car exports for the past year have not been made public, but they are estimated to have been around 2.3 million.

According to the report, while China's car exports were previously concentrated in countries with low per capita incomes or politically close to China, such as Russia, Iran and Latin America, the sector is now growing in Europe and increasing its current market share. is achieving market as a result of high quality.

China is boosting its auto exports and has signed free trade agreements with the Association of Southeast Asian Nations, Chile, Peru and Australia, to name a few.

As a result, the report said that South Korea should quickly sign new free trade agreements with markets that have potential for future growth, such as those in the Middle East and Latin America.

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Seoul pledged strong support to exporters on Thursday after it was revealed that South Korea's gross domestic product contracted by 0.4% in the most recent quarter, while exports fell by 5.8% during the same period.