By Ju-min Park
INCHEON, South Korea (Reuters) -From the muddy grounds of a former amusement park on South Korea's coast, tens of thousands of vehicles are being packed for shipment overseas as booming used car exports help to mitigate the impact of U.S. tariffs on new car sales.
Soaked in sweat from the outdoor heat, workers are loading and strapping cars into containers around the clock for shipment from the makeshift facilities at South Korea's largest used car export hub in Incheon, west of Seoul.
"It is embarrassing for us to say ourselves our business is a star export item," said Kevin Seol, a trader who ships about 100 used cars monthly. "But the industry keeps growing by numbers so I think we are contributing to the national exports."
South Korea's auto shipments to the U.S. have declined for six consecutive months since President Donald Trump announced 25% tariffs.
But its global car exports have risen for three straight months, supported by record-high second-hand vehicle sales, which accounted for a quarter of the total auto exports by volume and 13% by value, according to trade ministry and customs data.
South Korea exported $5.5 billion of cars in August, up 9% from a year earlier and the highest monthly total on record, the trade ministry said. Used car exports jumped 35% to $711.5 million the same month, according to the Korea Used Car Distribution Research Institute.
The used vehicle growth is largely propelled by insatiable demand for older Hyundai and Kia cars in Russia and in the Middle East and a weaker won, traders and experts said.
"Exports to the U.S. don't account for much of our business," Seol said. "Demand from other countries is strong, so the tariffs haven't really hurt us."
TARIFFS COULD RAISE USED CAR PRICES
South Korea exports most of the used cars that are sold to the Middle East, Central Asia and Russia, according to government data and traders.
In those markets, Korean cars can be more attractive than those from export rival Japan because they are designed for driving on the right side of the road, whereas Japan drives on the left, traders said.
In South Korea's biggest new car export market, the U.S., exports have been hobbled by a 25% tariff that remains higher than the 15% rate for Japanese and European cars, though Seoul is in negotiations for a reduction.
But while U.S. tariffs are a negative for the new car market, they could lead to further demand and higher prices for used vehicles, said Shin Hyun-do, director of the Korea Used Car Distribution Research Institute.
[SRC] https://finance.yahoo.com/news/analysis-south-koreas-booming-used-220256773.html
