Honda will discontinue its automobile sales operations in South Korea by the end of 2026, while continuing to operate its motorcycle business and provide after‑sales services in the country.
The decision follows a strategic review that found the South Korean auto market no longer aligns with Honda’s long‑term profitability goals. Domestic vehicle sales fell 22% year‑on‑year to 1,951 units in the fiscal year ending March 2026, and the company sold 43,000 motorcycles that year, underscoring the relative strength of its motorcycle business.
Exchange‑rate pressure from a strong dollar has eroded margins on vehicles imported from the U.S., while competition from Hyundai, Kia, and Chinese EV makers such as BYD and Tesla has intensified. Honda’s slower electrification rollout has also limited its ability to compete in the growing EV segment.
By exiting vehicle sales, Honda will free up resources to reinforce its hybrid strategy and core automotive markets in North America and Japan, and to deepen its motorcycle presence, which holds roughly 40% of the South Korean market.
Lee Ji‑hong, Honda Korea’s CEO, said, "Considering changes in the global and South Korean market environments, we will end our automobile sales business in the South Korean market starting at the end of this year." He added, "We will focus the company's capabilities even more on motorcycles, our core business sector, and continue to expand our product strength and customer service." He also explained, "Since all domestically sold vehicles are produced in the U.S., the strong dollar had a significant impact." "Although we consistently pursued cost reductions and lineup changes, we decided to halt sales due to the judgment that medium‑ to long‑term difficulties could be substantial." The move is part of a broader global restructuring that has projected a net loss of up to ¥690 billion for the fiscal year ending March 2026.
Honda’s history in South Korea began in 2001, with auto sales starting in 2003. The brand peaked in 2008 with over 10,000 annual sales, but a 2019 trade dispute and subsequent boycott of Japanese products contributed to a sharp decline, leaving the company with only 1,951 vehicles sold in FY 2025‑26.
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