South Korean Minicar Sales Plunge to Historic Low as SUVs Dominate the Market

South Korea's Small Car Market Hits a Speed Bump

Domestic sales of minicars in South Korea reached a record low in 2025, signaling a significant shift in consumer preference within the nation's automotive landscape. According to data from the Korea Automobile Manufacturers Association (KAMA) and Carisyou Data Lab, only 74,600 new mini passenger cars were sold last year, a sharp 24.8% decline from 2024.

• Record Low: This marks the first time in two decades that annual sales fell into the 70,000-unit range, a far cry from the peak of 216,221 units recorded in 2012.
• Lack of New Options: The industry has seen a drought of new models since the launch of the Hyundai Casper in 2021 and the Kia Ray EV in 2023.
• SUV Dominance: Analysts attribute the slump to the overwhelming popularity of small SUVs, which offer more space and features for consumers willing to pay a premium.

Korea Context: The 'Gyeong-cha' Culture

In South Korea, minicars—locally known as Gyeong-cha (light cars)—are defined by strict regulations: they must have an engine displacement of less than 1,000cc and meet specific size dimensions. Historically, the government has incentivized these vehicles with lower taxes, reduced highway tolls, and cheaper public parking fees to manage urban congestion. For decades, they were the go-to choice for first-time buyers and urban commuters.

However, the rise of the chaebol (large family-owned conglomerates) like Hyundai Motor Group has led to a market shift toward larger, higher-margin vehicles. The 'small SUV' segment has effectively cannibalized the minicar market by offering better perceived social status and utility, even if the price tag is higher.

Why Global Readers Should Care

For international investors and automotive observers, this trend highlights a unique market paradox. While global markets are often looking for smaller, more efficient EVs, the South Korean domestic market is moving toward larger frames. This puts pressure on Hyundai and Kia to balance their domestic production of low-margin minicars with the high-demand SUV and EV segments.

Interestingly, there are signs of a 'price-driven' reversal. Early 2026 data shows a 10.9% year-on-year increase in January sales. As the cost of larger vehicles continues to climb due to high interest rates and upgraded tech features, budget-conscious Korean consumers may be forced back into the arms of the minicar, suggesting that the 'death' of the small car may be premature.