New Car Purchases by 20-Somethings Rise Again After One Year

In Q1 of this year, new car purchases by people in their 20s in the domestic market surged by 35.7% year-on-year, reversing a multi-year decline. The trend of annual decrease, driven by factors such as rising car prices and the spread of the sharing culture, has been overturned in this first quarter. According to Kaizyu Data Research Institute, new car registrations by people in their 20s (passenger vehicles) in Q1 this year amounted to 20,356 units, a 35.7% increase from the same period last year (15,006 units). This represents the highest growth rate among all age groups, and people in their 20s accounted for 7.5% of total registrations. Last year, the share of new car registrations by 20-somethings had fallen to a 10-year low of 5.6%.

This increase in new car purchases by 20-somethings is analyzed to be linked with a rise in electric vehicle (EV) purchases. In Q1 of this year, EV registrations by people in their 20s surged by 228.5% to 4,605 units, up from 1,402 units in the same period last year. The proportion of EVs within total new car purchases by 20-somethings also rose by 13.3 percentage points, from 9.3% to 22.6%.

Experts suggest that reduced barriers to EV purchases, thanks to government subsidies and price cuts by manufacturers, have driven EV adoption among 20-somethings. Indeed, the Tesla Model Y, which saw price reductions of up to 10 million won early this year, and Kia's EV3, both ranked among the top 10 new car registrations for this age group.