Ssangyong Motor

Exports of Korean automobiles and auto parts in 2006 are poised to top $40 billion, marking a new milestone

for the domestic auto industry, the government said yesterday.

Local auto makers and auto-parts manufacturers are expected to achieve a combined total of $43.3 billion

in exports by the end of 2006, a year-on-year jump of 13.9 percent, the Ministry of Commerce, Industry and

Energy said. It would also be the fifth straight year since 2002 that the country has achieved double-digit

growth. The ministry expects auto exports to total $48.5 billion in 2007.

The new record comes despite Korean auto companies building offshore manufacturing plants.

The Commerce Ministry attributes the strong overseas demand for Korean automobiles and auto parts to

their improving quality and growing brand recognition. It expects to see a total of 2.7 million vehicles exported

this year. The trade surplus is expected to stretch to $37.3 billion in 2006 from the $33.2 billion registered

in 2005.  Annual production of automobiles is expected to total 3.82 million units this year, slightly lower than

the 4 million units projected earlier in the year, because of labor strikes at the nation's major automakers

during the summer.

Strong demand for Korean cars overseas has been a major contributor to the country's robust performance

in exports, which has been the local economy's major growth driver amid weak domestic consumption.

Exports account for about 40 percent of the nation's gross domestic product.

The Bank of Korea, however, expects the economy to cool next year. It also projects the current account

surplus, the broadest measure of trade, to contract to $2 billion in 2007 from $6 billion this year.

The central bank expects the economy to expand 4.4 percent next year, a slowdown from the 5 percent

target this year.

- Source from the Korea Herald(20th Dec, 2006)