I. Introduction: The K-Parts Crisis, Why Your Car Is Stuck

recently, the domestic used car parts market is facing a severe shortage, and consumers are suffering from delays in vehicle repairs. in 2023, the number of automobile-related complaints filed with the Consumer Complaint Center increased by 11.3% year-on-year.and the number of consumer damage claims for auto parts in particular skyrocketed by a whopping 161.8%. this is more than just an inconvenience, it indicates a paralysis of the entire domestic auto maintenance ecosystem.

the shortage of used car parts is not limited to specific technologies or high-tech parts. In the past, the shortage of automotive semiconductors was the main cause, but in recent years, the shortage of safety-critical airbag components or critical suspension and engine components, as well as simple exterior parts like bumpers that don't contain semiconductors.the shortage of parts has led to months-long delays in repairs, especially for owners of commercial vehicles whose livelihoods are threatened if their vehicles are shut down.

under the current Motor Vehicle Management Act, manufacturers are obligated to supply parts for repairs for at least eight years from the time a vehicle is discontinued. however, while manufacturers focus on producing new cars, it is argued that the obligation to follow up on existing vehicles is not providing a real shield against export pressure from the market. In fact, there has been only one case in the last five years where the MOLIT has ordered manufacturers to supply parts.indicating that regulators have failed to detect and enforce this system breakdown in time. this means that the domestic parts circulation supply chain is structurally broken.

II. Structural causes: the paradox of the used car export "boom" and the supply cliff

the most fundamental cause of the shortage of domestic used car parts stems from the paradox of the 'global success of K-cars'. korean-made used cars are recognized for their durability and quality, which has led to an explosive demand in emerging markets such as the Central Asian used car market, which has led to a surge in used car exports. Overseas buyers are willing to pay much higher prices than the domestic value-added process of dismantling vehicles into parts and recycling them.than the domestic value-added of dismantling vehicles into parts and recycling them. this is due to local tariff advantages and the high scarcity of domestic parts.

this export pressure is rapidly depleting the domestic pool of "scrap vehicles" that underlies the domestic parts supply. scrapping vehicles is not just scrap metal disposal, but an important pillar of the circular economy that generates economic benefits by recovering parts and non-ferrous metals. however, when vehicles are shipped overseas in their entirety, the domestic cycle is broken.

add to that the domestic trend of "vehicle longevity" and you have a supply shortage. drivers' ability to thoroughly maintain their vehiclesand regular replacement of consumables (engine oil, tire repositioning, etc.) have increased the average lifespan of cars, which has resulted in slower scrapping. The domestic parts market is facing dual pressures ofdelayed incoming vehicles due to longer vehicle lifespan andoutflow of incoming vehicles due to surging exports.

as part of the low-emission project for old diesel vehicles, the government provides early scrapping subsidies of up to KRW 8 million for diesel vehicles with emission levels 4 and 5to improve air quality. however, if the export price of used cars abroad is more attractive than this subsidy, the vehicles will leave the country, defeating the purpose of domestic environmental improvement policies. In turn, the decline in the domestic scrapped vehicle fleet is the underlying structural cause of the accelerating shortage of used car parts supply.

the 'double pressure' that created the domestic used car parts supply cliff

type of pressure operating Mechanism (Cause) structural influences in the domestic parts market overseas export pressure (demand explosion) K-Vehicle popularity and tariff advantages to export whole (used car exports, Central Asian used car markets) depletion of domestic scrap recycling pools and concentration of dismantlers' overseas sales (scrap parts) pressure to delay domestic circulation (reduced supply) trend toward longer vehicle lifespans and early retirement of some vehicles (fewer scrapped vehicles) declining parts inventory turnover and tightening aftermarket parts supply due to new car production (used car parts shortage)

III. Deepening Structural Change: Paralyzing Scrapyards and Revitalizing Illegal Trade

the explosion of used car exports is also changing the structure of the domestic scrap car industry. domestic junkyards are transforming into 'parts dismantlers' that focus on the much more profitable export of used car parts (used car parts export) rather than supplying parts for the domestic repair market. while the global automotive recycling market is evolving into a high-tech industry with the introduction of AI and robotics to improve the efficiency of parts separation and material recoverykorea is losing the opportunity to develop high-value dismantling technologies and is at risk of becoming a mere 'used resource exporter' as whole vehicles are shipped out of the country.

as legitimate domestic used car parts supply chains have been paralyzed by overseas demand, illegal distribution channels have sprung up to fill the void, with the export of cannon car parts in particular illustrating the severity of the problem. organized crime syndicates buy cannonballs at half market value from internet used car dealerships that are unable to be exported due to theft, repossession, or tax delinquency.

they falsify the paperwork to trick customs into thinking they're exporting old vans, then dismantle the vehicles and smuggle them out of the country, such as Cambodia, where they are actually unexportable.or use a so-called "swap scheme. instead of a low-value vehicle declared for export, a high-value vehicle leased in the name of a bad creditor is loaded into a container and taken out of the country. these illegal used car exports have reportedly generated over KRW 1 billion in ill-gotten gains for the gang alone.this proves that illegal profits are being maximized while the supply of legitimate parts is paralyzed.

IV. Consumer Safety Threats: Counterfeit and Uncertified Parts Thrive

the shortage of genuine domestic used car parts goes beyond just delaying repairs; it threatens consumer safety and the public environment.

first, the distribution of counterfeit safety-essential parts. there have been cases where counterfeit branded parts, such as fake seat belt clips imported from overseas to take advantage of the shortage of genuine parts, have been distributed in Korea. it was found that more than 15,000 pieces, with a market value of 280 million won, were sold over a period of two years.this is a serious problem that threatens safety features that are directly related to the lives of vehicle occupants.

second, there is the proliferation of uncertified reduction devices that accelerate environmental pollution. more than 24,000 emission reduction devices (ternary catalysts and DPFs) not certified by the Ministry of Environment were found to be illegal, with a market value of KRW 3.3 billion. these products were sold as genuine or remanufactured products in online shopping malls and small repair shops, and even reverse importation through overseas online malls was confirmed.

these uncertified abatement devices have little or no catalytic components that convert emissions into harmless substances, resulting in significantly lower performance. according to test evaluations by the Korea National Institute of Environmental Science and Technology, these devices fail to meet hydrocarbon (HC) and nitrogen oxide (NOx) reduction standards, and their performance deteriorates with age. this has a direct societal cost in terms of poor air quality and threats to public health. parts shortages expose consumers to low-quality products and directly undermine the air quality improvement goals that governments have sought to achieve through early retirement subsidies.

types of harm to domestic consumers caused by parts shortages

damage Type severity indicator major incidents and side effects delays in parts supply

161.8% spike in auto parts-related claims

months of waiting for repairs, shortages of safety-critical parts such as airbags, and threats to livelihoods of commercial fleets

illegal/counterfeit parts distribution

3.3 billion won worth of uncertified abatement devices seized and counterfeit safety parts distribution

reduced vehicle performance, accelerated environmental pollution, and threatened safety essential functions

V. Conclusion and Recommendations: Diagnosis for a Sustainable K-Parts Ecosystem

the shortage of domestic used car parts is not simply an issue of supply and demand imbalance in the market, but a structural problem that combines the global economic success of K-cars with institutional weaknesses in the domestic circular economy system. This supply cliff goes beyond consumer inconvenience and is causing widespread social costs in terms of safety threats, undermining environmental regulations, and enabling organized illegal distribution. to build a sustainable domestic automotive ecosystem, the following fundamental systemic reforms are urgently needed.

first,strengthening regulatory oversight of manufacturers' fulfillment of parts supply obligationsis essential. to ensure that manufacturers' obligation to supply parts for eight years after a vehicle is discontinued actually works, MOLIT should take steps to identify the actual situation and strengthen the implementation order system.we need to ensure safety and access to maintenance, which are public issues that cannot be solved by the economic logic of the market alone.

second, it is importantto revitalize the market for quality-certified parts (alternative parts) and secure trust. To reduce reliance on OEM parts and help circulate domestic parts, financial authorities are incentivizing consumers to switch by reimbursing 25% of the list price of OEM parts when using certified parts. these policies should increase consumer confidence in quality-certified parts and build a healthy parts supply chain that supports a domestic circular economy.

third, we needa strong and continuous crackdown on illegal distribution channels. the Korea Customs Service, Ministry of Environment, and Ministry of Land, Infrastructure, and Transport should jointly establish an e-commerce surveillance system to quickly block illegal used car export routes and the import and online sale of uncertified parts.and crack down on cannonball dismantling and smuggling organizations. breaking the cycle of illegal profits that parts shortages create will be an important first step in normalizing the market.