Used car exports to Russia fall by double digits in January 2026, export routes turn on red lights

*This content was translated by AI.

As of January 2026, Korea's used car export market is facing an unprecedented inflection point due to severe uncertainty and crisis surrounding the Russian market behind the ostensible rise in performance. According to the latest indicators from the Ministry of Trade, Industry and Energy and the Korea Customs Service, overall automobile exports appear to remain solid at the start of the new year, but voices on the ground are completely different.

In particular, the volume of goods bound for Russia, which has served as a base for exports of used cars in Korea, faces the double whammy of rapid institutional changes and financial regulations, and pessimism is spreading within the industry that it can never be optimistic about future prospects. At the heart of this crisis is the scrapped car tax policy, which the Russian government has raised significantly since January 2026, in the name of protecting its automobile industry. Earlier in December last year, Russia raised recycling taxes on automobiles significantly. In November last year, there was a time when the increase plan was foreseen and the pre-sale trend was reflected, showing record exports. In January, however, the drop in the number of exports fell significantly, reaching up to 60 percent. The main reason is that as taxes imposed on imported cars have soared, local sales prices of Korean used cars have soared to levels that consumers cannot afford, which is directly linked to a decline in purchasing power, which is a decisive factor in reducing vitality in the market as a whole.

Pathways to bypass direct exports to Russia are also being blocked. The method of passing through Central Asian countries such as Kyrgyzstan and Kazakhstan, which used to be a major bypass export channel for Korean used cars in the past, is also on the verge of being virtually blocked. Russian authorities are tightening the breath of the gray market by implementing strong regulations that retroactively collect unpaid tax amounts for vehicles registered by detour or deny registration itself. Until now, large SUVs such as Palisade and the latest hybrid models have been actively supplied through this route, supporting much of the export performance, but the blockage of the passage has put domestic exporters on alert to handling inventory.

Moreover, as international financial sanctions against Russia continue, even the payment system that can safely recover export payments is approaching a state of paralysis, and the risk of not receiving money even after sending goods is reaching its peak. As the remittance bottleneck intensifies, small and medium-sized exporters are struggling with financial difficulties, which goes beyond simple declines in volume and faces a problem of the industry's right to live.

In terms of technology, the quality and brand reliability of Korean used cars still remain among the best in the world, and the demand from local consumers also potentially exists. However, no matter how highly marketable and highly preferred, the popularity of the market is difficult to lead to actual sales in situations where physical logistics networks are blocked and financial transactions are impossible. In particular, various non-tariff barriers strengthened from January 2026 suggest that the Russian special that the Korean used car industry has enjoyed so far has effectively ended. Industry officials predict that while the current situation may seem to maintain export volume, it is only an optical illusion that reflects high taxes and rising costs, and that the actual number of exports will draw a steep downward curve. As a result, domestic companies are facing an urgent task of finding new alternative markets such as the Middle East, Africa, and South America by breaking away from the export structure concentrated in Russia.

In conclusion, the used car export market in January 2026 shows signs of structural collapse behind the brilliant indicators. If the government's financial support measures and diplomatic efforts are not combined, exports of used cars, which were once beneficial items, will not be able to avoid a sharp crunch. Considering that automobiles are a key pillar of economic exchanges between countries beyond simple products, the series of events currently taking place in the Russian market has great implications for the entire Korean automobile industry. Now is the time to prepare for the upcoming cold season through realistic risk management and market diversification rather than leaning on a rosy outlook. Amid growing confusion at export sites, a clever strategy modification to preemptively secure competitiveness in new markets is more urgent than ever by upgrading a transparent history management system and a certification system specialized in electric vehicles.

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*This content was translated by AI.