Vehicle output in South Korea is expected to rise slightly to 4.51 million units in 2015 from this year, thanks to growing demand, a report by the state-run industrial think tank showed Thursday.
   
According to the Korea Institute for Industrial Economics and Trade (KIET), next year's numbers represent a 0.5 percent gain from 4.49 million cars that are expected to be produced in the country this year.
   
Domestic sales of automobiles should increase 1.7 percent on-year to a little over 1.66 million units next year, while exports, measured in value, can advance 2.8 percent to US$77.85 billion, KIET said. 
   
Compared to 2014, the country is expected to pay $14.52 billion to bring in cars from abroad next year. This represents a 7.2 percent jump from numbers expected for this year.
   
"The rise in unit cost of locally made cars, and economic recovery in some advanced industrialized economies should boost sales and benefit carmakers," KIET said. 
  
South Korean carmakers have started to make more upper-end and midsize sedans as well as SUVs in recent years, pushing up unit prices. However, the weak Japanese yen that could hurt the price competitiveness of South Korean automakers and sluggish growth in developing economies will limit gains in their profits, the KIET said. Emerging markets such as China have become key overseas markets for South Korean carmakers. China's growth, while still very strong, shows some signs of slowing down, which could also impact demand.
   
South Korean automakers, such as Hyundai Motor Co. and Kia Motors Corp., also compete directly with Japanese rivals, such as Toyota Motor Corp. and Honda Motor Co., in the global market.
  
Japanese carmakers have started to lower prices, or add considerably more technology content to their vehicles, which is undercutting the value proposition of South Korean companies.
   
Besides cars, the latest industrial estimate showed information technology and other key manufacturing sectors, such as steelmaking and shipbuilding, likely growing in the lower single digits in 2015, while output in petrochemicals and textiles may actually contract, mainly due to weak domestic consumption. 
   
Total ships built at South Korean yards could reach 11.9 million compensated gross tons (CGTs) in the new year, up just 0.8 percent from 11.8 million CGT forecast for this year.
   
Steel output may top 75.86 tons in 2015, up 2.2 percent from estimates for this year. Semiconductor production can reach 81.37 trillion won, a modest gain of 3.1 percent from numbers forecast for 2014. 
  
In regards to petrochemicals, KIET said production is expected to contract 2.7 percent on-year to just over 21 million tons, with textiles to dip 0.6 percent to 1.94 million tons. (Yonhap)