Honda Korea to exit auto market by end of 2026 amid falling sales

Honda Korea announced Wednesday it will wind down its automobile business by the end of 2026, citing a 22% drop in vehicle sales during 2025 and the company's inability to keep pace with Korean rivals in electric vehicle development, according to the Korea Times.

The exit ends a 22-year run for Honda automobiles in Korea and underscores the mounting pressure on legacy foreign automakers as Hyundai and Kia accelerate electric vehicle investment and domestic market dominance.

Honda Korea sold 1,951 vehicles in 2025, a 22% decline from the prior year, according to the Korea Times. The company's automobile sales peaked above 10,000 units in 2008 before a prolonged decline that Honda could not reverse.

"We sincerely appreciate the support we have received from our customers, dealers and parners [sic] who have shown great interest in Honda automobiles," Honda Korea CEO Lee Ji-hong told reporters during a press conference.

Lee cited market conditions as the key driver behind the exit. "Considering changes in the market environment, such as the fluctuating exchange rate, Honda Korea decided to concentrate our resources on key areas to secure long-term competitiveness," Lee said.

Competitors Hyundai Motor and Kia have expanded their electric vehicle investments with broad EV lineups, widening the gap against foreign automakers still developing electrification strategies, the Korea Times reported.

Honda Korea will redirect resources to its motorcycle business, which has sold more than 420,000 units since the company entered the Korean market in 2001 and holds the leading market share. The company said it will continue after-sales service for existing automobile customers to limit disruption.

Honda first began selling automobiles in Korea in 2004. The company plans to complete its automobile wind-down by the end of 2026 while maintaining after-sales support through its service network.