South Korea’s imported vehicle market is undergoing a significant structural shift, with Chinese electric vehicle makers rapidly expanding their presence as Japanese carmakers continue to exit, The Korea Herald reported.
Honda Motor announced on April 23 that it would discontinue automobile sales in South Korea after more than two decades of operations, citing changes in the global and local automotive environments. The withdrawal follows the exit of Nissan Motor and Infiniti from the market in 2020, leaving Toyota and Lexus as the only remaining Japanese brands operating in the country. Industry observers attributed the retreat of Japanese brands to a combination of factors, including a limited range of electric models, narrow product lineups, and intensifying competition from both foreign luxury and domestic manufacturers.
On the other side of the ledger, Chinese brands are aggressively expanding. BYD, China’s largest electric vehicle maker, officially entered the South Korean passenger car market in January 2025 and surpassed 10,000 cumulative sales within roughly 11 months, driven largely by strong demand for its Dolphin compact hatchback, which is priced in the 20 million won range, or approximately US$13,489. The model has found traction among younger, price-sensitive buyers.
Sales data from the Korea Automobile and Mobility Industry Association showed that Chinese-made electric vehicles – including Tesla models assembled in Shanghai – reached 25,000 units in the first quarter of 2026, a jump of 286.1 per cent from the same period a year earlier. Chinese-built EVs now account for 33.9 per cent of newly registered electric vehicles in South Korea, up sharply from 4.7 per cent in 2022, while domestic brands’ share of EV registrations has fallen from 75 per cent to 57.2 per cent over the same period.
Several other Chinese manufacturers are preparing to enter the market. Zeekr, the premium electric vehicle brand under Geely Automobile, established its Korean subsidiary – Zeekr Intelligent Technology Korea – earlier this year and is expected to launch its 7X midsize electric sport utility vehicle in the second half of 2026, competing against models such as the Tesla Model Y and Hyundai Ioniq 5. Xpeng, widely described as the technology-focused counterpart to Tesla in China, is also said to be preparing a Korean market entry with models including the P7 sedan and G6 coupe-style SUV.
Industry analysts cautioned, however, against interpreting the Chinese advance as a straightforward replacement for departing Japanese brands. Kim Pil-soo, an automotive engineering professor at Daelim University, said the core demand base for Japanese brands – largely hybrid buyers – remained distinct from the early-adopter consumer profile currently driving EV purchases. He noted that the market was currently in a transition phase, with hybrids and plug-in hybrids gaining share, but added that within three to four years, EVs could move toward the mainstream, at which point Chinese brands could play substantially larger roles in shaping market dynamics.
