Honda Korea will withdraw from South Korea’s automobile market after more than two decades, ending vehicle sales in the country by year-end while maintaining after-sales support, as the company pivots to its motorcycle business.
The decision follows a strategic review aimed at strengthening long-term competitiveness in the South Korean market, Chief Executive Lee Ji-hong said, citing shifting market dynamics and currency trends.
Honda Korea will continue to operate service functions in South Korea, including parts supply, warranty coverage and vehicle maintenance. The company said it will meet its legal obligation to provide support for at least eight years and is considering additional measures to minimize disruption for customers. Discussions with local dealership partners on winding down sales operations are expected to begin soon.
Honda first entered South Korea in 2001 with motorcycles before launching its car business in 2004. It later became the first import brand in the country to surpass annual sales of 10,000 vehicles. In total, Honda Korea has sold about 108,600 cars in the South Korean market.
Performance in South Korea has deteriorated sharply in recent years. Honda Motor Co. said it expects to post a net loss of as much as $43 billion for the fiscal year ending March 2026, which would mark its first annual loss since listing in 1957.
Sales in the South Korean market have also declined steeply. According to the Korea Automobile Importers and Distributors Association, Honda Korea registered 211 new vehicles in South Korea in the first quarter, down about 70% from 704 a year earlier. Its share of the country’s import-car market fell to 0.26% out of a total of 82,120 vehicles.
The company attempted to revive demand in South Korea with new models, including preorders for the “New Pilot Black Edition” sport-utility vehicle launched in April, but those efforts failed to reverse the broader downturn.
Addressing concerns about declining resale values in the South Korean market, Mr. Lee said the company has no plans to offer compensation, noting that used-car prices are influenced by multiple factors.
Honda Korea will now concentrate on its motorcycle business in South Korea, where it maintains a leading position. The company has sold roughly 420,000 motorcycles in the country as of March 2026 and holds the top market share. Mr. Lee said Honda plans to expand customer experiences and further develop motorcycle culture in South Korea.
The exit underscores the growing challenges faced by foreign automakers in South Korea’s increasingly competitive and rapidly evolving auto market, where shifting consumer preferences and macroeconomic pressures are reshaping demand.
