At Korea’s bustling Pyeongtaek Port, rows of gleaming export-bound cars lined up in early December offered a striking visual of a sector on the rebound. After months of uncertainty and sluggish numbers, the nation’s automobile exports to the United States finally rose in November 2025, breaking an eight-month streak of decline. According to the Ministry of Trade, Industry and Resources, this uptick—5.1 percent year-on-year to $2.7 billion—was a welcome sign for an industry that had been shadowed by tariff fears and shifting global demand.
November’s total auto exports reached $6.41 billion, up 5.3 percent from the previous year, marking the second-highest November on record, just shy of 2023’s $6.53 billion, as reported by Korea JoongAng Daily. From January through November, exports edged up 2 percent to $66.04 billion, setting a new record for that period. The Trade Ministry now projects that, if this pace continues, Korea’s full-year auto exports could surpass last year’s record of $70.9 billion.
But what’s behind the sudden reversal in U.S.-bound shipments? The answer, in large part, lies in international diplomacy. Earlier in the year, Korean automakers were rattled by the prospect of a hefty 25 percent tariff on cars exported to the United States. That cloud hung over the industry until a Korea-U.S. summit in late October produced a breakthrough: tariffs would be lowered to 15 percent, matching those imposed on Japanese and European Union vehicles. With this uncertainty resolved, Korean carmakers regained their footing in the American market, and optimism began to return.
“With tariff-related uncertainty resolved after talks with the United States, the government will step up support for the auto industry ecosystem next year by advancing AI-based autonomous driving technologies, encouraging investment and research and development in environmentally friendly vehicles and easing export-related difficulties,” a spokesperson for the Trade Ministry told Korea JoongAng Daily.
While the U.S. market had been a source of anxiety, Korean automakers found growth elsewhere. Shipments to the European Union surged by 19.7 percent, exports to other European countries jumped 33.6 percent, and those to Asia soared 38.3 percent over the January-November period. This diversification helped keep overall export numbers strong, even as U.S.-bound shipments dipped 14.2 percent for most of the year before their November recovery.
One of the brightest spots in Korea’s export story has been the rise of environmentally friendly vehicles. In November alone, exports of hybrids and electric cars totaled $2.32 billion, up a remarkable 26.3 percent from the previous year. Hybrid vehicle exports reached 54,296 units, a 39.8 percent increase, with their export value climbing 49.9 percent to $1.55 billion. These figures highlight the growing global appetite for greener transport options—and Korea’s ability to deliver.
Yet, not all the news was upbeat. Domestic auto sales in November slipped 1.1 percent to 146,000 units. Locally produced vehicle sales fell 5.2 percent to 115,000 units, while imported vehicle sales bucked the trend, jumping 18.2 percent to 31,000 units. However, electric vehicles (EVs) provided a much-needed boost on the home front. Cumulative EV sales from January through November soared 52.2 percent year-on-year to 207,119 units, smashing the previous annual record of 158,000 set in 2023. Tesla’s performance was particularly striking: the U.S. automaker sold 55,594 vehicles in Korea over the same period, up 95.1 percent, and its November sales alone leaped 110.9 percent to 7,632 units.
The government’s focus now turns to the future. Plans are underway to bolster the auto sector in 2026 by supporting AI-based autonomous driving technologies, facilitating investment and R&D in eco-friendly vehicles, and addressing export-related hurdles. The Trade Ministry’s strategy is clear: sustain momentum by fostering innovation and helping Korean companies adapt to an ever-evolving global market.
This spirit of adaptation is echoed across other export-driven sectors. According to a recent survey by the Korea Federation of Small and Medium Business, optimism is running high among Korean SMEs, particularly in cosmetics, medical, and biotechnology fields. Of the 1,300 small- and medium-sized enterprises surveyed between December 1 and 12, a robust 68.6 percent expect export growth in 2026 compared to 2025. The outlook is even more bullish among cosmetic firms (86.4 percent) and medical and biotechnology companies (86.1 percent), as reported by The Korea Herald.
What’s fueling this confidence? Respondents pointed to upcoming product launches, ongoing quality improvements, the diversification of export destinations, favorable exchange rates, and economic recovery in major importing countries. These factors, they believe, will help them ride out external headwinds and tap into new markets.
However, challenges remain. About half of the surveyed SMEs cited China’s aggressive low-price strategy as a significant obstacle, followed by exchange rate volatility, rising raw material costs, and the unpredictability of U.S. and European tariff policies. Despite these hurdles, the United States remains the most coveted market for expansion, trailed by Europe, Japan, and China.
To stay competitive, SMEs are calling for more robust government support. Their wish list includes expanded export voucher packages, systems to counter China’s pricing tactics, strengthened diplomatic efforts to address tariffs, increased aid for participation in overseas exhibitions (especially in emerging markets), and help navigating foreign regulatory hurdles. As Choo Moon-gab, head of the Economic Policy Department at the Korea Federation of Small and Medium Business, put it, “Despite the difficult external factors such as more restrictive export regulations by countries, the fact that SMEs are forecasting an export growth through strengthening product competitiveness means a lot.” He added, “However, as the ability to cut down costs such as production, logistics, tariffs and lead time will determine a company’s export competitiveness from now, the government should come up with support measures that can help SMEs cope with China’s low-price strategy and prepare competitiveness in the global market.”
The message from both large and small exporters is clear: in a world of shifting tariffs, volatile markets, and fierce competition, adaptability and innovation are the twin engines of growth. For Korea, the recent rebound in auto exports and the optimism among SMEs suggest that the country’s export machine is far from running out of steam. With the right mix of government support, technological advancement, and strategic market diversification, Korean exporters appear poised to weather future storms—and maybe even set new records along the way.
