"Fears of a 'Robot Vacuum Repeat'... China Quietly Expands Its Reach Into Automotive Parts"

Chinese Auto Parts Imports Surge to $1.439 Billion in First Half
15.3% Year-on-Year Increase Sets All-Time High for H1
Popularity of Chinese-Made Vehicles Like Tesla and BYD Drives Demand
Heightened Reliance on Chinese Parts Threatens Domestic Su

The penetration of Chinese automobiles in the domestic market is rapidly expanding from finished cars to batteries and automotive components. After Chinese-made electric vehicles have come to account for one out of every three EVs in Korea, imports of Chinese automotive parts have also reached an all-time high. Analysts indicate that China is making a strong push into the Korean market, leveraging its competitiveness across the entire automotive supply chain, from batteries to components and finished cars.

Tesla Model Y. Tesla Korea homepage

Import Value Rises 50% in 5 Years... All-Time High Expected This Year

According to the import-export trade statistics from the Korea International Trade Association as of August 13, the import value of Chinese automotive parts in the first half of this year amounted to 1.43905 billion dollars. This represents a 15.3% increase compared to 1.24794 billion dollars during the same period last year. Among total automotive parts imports during this period, Chinese products accounted for a dominant 53.8% share, firmly ranking at the top.

Imports of Chinese automotive parts have been rising sharply each year. From 1.7 billion dollars in 2021 to 2.477 billion dollars in 2025, the figure is estimated to have surged by about 45%. The pace of growth has accelerated this year, and at this rate, annual imports of Chinese-made parts are forecast to set a new record high.

The increase in Chinese parts imports is in line with China’s expanding influence in the finished vehicle market.

According to the Korea Automobile Mobility Industry Association (KAMA), in the first half of this year, 69,513 newly registered electric vehicles in Korea were made in China, up 178.7% from the same period a year earlier. This means Chinese-made EVs accounted for 35.0% of newly registered EVs, with more than one in every three electric cars sold in Korea produced in China.

Chinese-made automobiles, especially electric vehicles, are also rapidly expanding their presence in Korea’s imported vehicle market. In the first half of this year, 79,444 imported vehicles were made in China, marking an increase of 127.8% year-on-year. In terms of country of manufacture, Chinese imports captured a 41.2% market share, overtaking Germany for the top spot. Compared to last year’s first-half share of 23.5%, this is a 17.7 percentage point rise in just one year.

The driving force behind the domestic penetration of Chinese-made EVs has been Chinese-manufactured models from Tesla and brands like BYD. Tesla’s Model Y and Model 3, produced at the Shanghai Gigafactory, have entered the Korean market in large numbers. Additionally, BYD’s entry-level EVs and other Chinese-built models such as Polestar are also seeing growing sales.

Fragile Domestic Parts Supplier Ecosystem

Concerns are emerging that increased imports of Chinese parts could have negative effects across the domestic parts supplier ecosystem.

Korean parts suppliers are highly dependent on domestic demand. However, sales of domestically produced finished vehicles in Korea are declining. On top of this, domestic parts companies are struggling to keep pace with electrification, resulting in growing dependence on Chinese components.

For example, the Tesla Model Y—having become the best-selling car in Korea in July, even surpassing the top domestic model “The New Grandeur”—is a product of the Shanghai Gigafactory. According to Tesla’s official announcement, vehicles produced at the Shanghai Gigafactory are assembled using parts supplied by more than 400 local Chinese partner companies. As a result, the proportion of Chinese-sourced components reaches as high as 95%.

A representative of a repair shop in Seoul explained, “In the past, we used Chinese OEM (Original Equipment Manufacturer) parts instead of domestic genuine parts to keep repair costs low. Now, with the surge of Chinese-made cars, Chinese-made parts are actually the genuine parts, so we have no other choice but to import and use them.”

The potential entry of Chinese parts makers into the domestic market is another variable. Chinese local parts companies have expanded their scale based on their home market, and are now making inroads into the global finished vehicle supply chain. The Korea Auto Industries Coop. Association (KAICA) has also analyzed that, as Chinese local suppliers grow, competition with Korean parts firms will become inevitable.

Against this backdrop, the automotive industry has called for the introduction of a domestic production promotion tax system to strengthen the competitiveness of Korean parts suppliers. However, the recently announced government tax reform plan ultimately excluded the automotive sector. The domestic production promotion tax system is a policy that provides corporate tax deductions linked to production and sales performance of strategic industry products within Korea.

An industry official commented, “Global auto brands are lowering prices by using Chinese parts, leaving only their brand names behind. The domestic production promotion tax system is not just for large domestic companies, but is essential for the survival of Korea’s entire auto parts ecosystem. Its exclusion is regrettable. We now need measures to support and sustain the parts industry ecosystem.”

This content was produced with the assistance of AI translation services.