Honda Korea CEO Lee Ji-hong, right, speaks during a press conference in Seoul, Thursday, to announce the company's plan to withdraw from the Korean auto market. Yonhap
Honda Korea’s recent decision to withdraw from the Korean automobile market is amplifying concerns among remaining Japanese carmakers Toyota Motor and Lexus over their long-term viability here in a rapidly shifting industry landscape.
Honda’s exit sends a clear message to its rivals that any foreign automakers which fail to embrace industrial changes — especially the transition toward electrification — will end up losing their foothold in one of Asia’s most competitive auto markets.
The latest development is seen as a warning sign for Toyota and Lexus, both of which currently lack fully electric vehicle (EV) lineups in Korea.
The Korean auto market has already witnessed the exits of several other once-renowned Japanese brands.
Subaru, which entered the Korean auto market in 2010, left after only about two years due to worsening profitability, driven by lackluster sales stemming from its limited vehicle lineup.
Nissan and Infinity, both of which once enjoyed solid popularity in Korea, also withdrew from business here in 2020, failing to overcome declining sales.
Industry officials underline that past failures from Japanese carmakers are clear examples demonstrating that firms that do not align with technological shifts and consumer preferences are eventually forced out.
Toyota Motor Korea's Camry hybrid sedan / Courtesy of Toyota Motor Korea
For now, Toyota and Lexus continue to enjoy relatively stable sales and revenue in Korea, buoyed by strong demand for hybrid cars, even as the market pivots towards mass adoption of electric vehicles (EVs).
Source: Korea Times News
