Honda Motor Co announced on Thursday that it will exit the South Korean automobile market at the end of this year due to sluggish sales, ending more than two decades of operations in a market dominated by domestic brands such as Hyundai Motor Co [1]. Honda began selling cars in South Korea in May 2004, reaching a peak of approximately 12,000 units sold in 2008. However, sales have since declined sharply, falling to roughly 2,000 vehicles in 2025 amid intensifying competition from local manufacturers [1].
Despite the withdrawal from the auto market, Honda will maintain its motorcycle business in South Korea, citing growth potential in that segment and a plan to concentrate human resources and capital there [1]. The company currently sells four imported car models in South Korea, including the Accord sedan and the CR-V sport utility vehicle. Honda stated that after-sales services, such as vehicle checks and repairs, will continue for existing customers [1].
Honda, Japan's second-largest automaker, has been reviewing its overall business strategy, particularly in electric vehicle (EV) development. For the fiscal year ended March, Honda is expected to post its first net loss since its 1957 listing, partly due to the impact of this strategic review [1]. Additionally, Honda and Sony Group Corp recently decided to scale down operations at their joint EV venture, which had planned to develop and market electric vehicles [1]. Honda will also discontinue gasoline vehicle production at one of its four plants in China and may do so at another, according to a source close to the matter [1].
CONCLUSION
Honda's decision to exit the South Korean auto market underscores the challenges faced by foreign automakers in a market dominated by domestic brands and reflects the company's broader strategic shift toward motorcycles and electric vehicles. The move is part of a series of restructuring efforts, including scaling back EV operations and discontinuing gasoline vehicle production in China, as Honda seeks to address declining sales and financial pressures.