Core Insights - The article discusses the recent decline in South Korea's automotive market, highlighting a 17% drop in domestic sales for major automakers in October 2025, attributed to a combination of extended holidays and structural changes in consumer preferences [4][7][9]. Group 1: Market Performance - In October 2025, the five major South Korean automakers sold 101,475 vehicles, down from 122,880 in the same month last year, marking a 17% decline [7]. - Despite the October drop, the cumulative sales for the first ten months of 2025 showed a 4.6% increase, rising from 1,114,278 to 1,139,082 vehicles [8]. - Hyundai and Kia experienced a technical adjustment in October, with Hyundai's domestic sales falling from 64,912 to 53,822 units, a 17% decrease, while Kia's sales dropped from 45,095 to 39,112 units, a 13% decline [7][8]. Group 2: Structural Changes - The decline in domestic sales is not solely due to reduced demand; it reflects a structural shift where luxury and imported electric vehicles are gaining market share at the expense of local brands [4][10]. - General Motors Korea's domestic sales plummeted by nearly 39% in the first ten months of 2025, indicating significant challenges for local brands against the backdrop of increasing competition from imported vehicles [8][9]. - The imported vehicle market saw a 13.2% year-on-year increase in new registrations in October, with Tesla's sales tripling compared to the previous year, highlighting a shift towards high-end and electric models [12][13]. Group 3: Consumer Behavior and Economic Factors - Economic factors such as a 2.4% year-on-year inflation rate and cautious consumer behavior are influencing purchasing decisions, leading to longer replacement cycles and increased price sensitivity [15]. - The cancellation of federal electric vehicle subsidies in the U.S. is expected to impact South Korean automakers, which rely heavily on exports and overseas production [15][16]. - The surge in second-hand car exports, which increased by 72% in the first half of the year, is providing some relief to the new car market but also indicates a shift in consumer purchasing behavior towards more economical options [18]. Group 4: Future Outlook - South Korean automakers are focusing on global electric vehicle strategies, with Hyundai planning to increase production capacity in the U.S. and Kia setting ambitious global sales targets [16]. - The competitive landscape is shifting, with imported luxury and electric vehicles continuing to penetrate the market, necessitating local brands to adapt their product offerings and marketing strategies [14][18]. - The article suggests that the automotive market in South Korea is entering a phase of restructuring, where traditional growth models may no longer suffice, and companies must innovate across various dimensions to maintain market relevance [18].