Korea's China dilemma deepens as Chinese carmakers expand strategic influence

Chinese carmakers are rapidly cementing their presence across Korea's automotive industry by expanding beyond low-priced electric vehicles (EVs) into strategic investments and critical supply chains. This puts their Korean counterparts in a state of growing dilemma over their future strategy, as the pace of Chinese carmakers’ inroads is widely seen as much faster and far-reaching than expected. The latest in a series of such moves came on Sunday when KGM signed a strategic investment agreement with China’s Chery Automobile. Under the agreement, Chery will invest $75 million in KGM and jointly develop mobility technologies with the Korean automaker. The deal followed the rapid expansion of BYD Korea. The Chinese EV maker entered the Korean market in January 2025, and rose to become the nation’s fourth-largest imported carmaker in the first half of this year. Reflecting on the success of BYD Korea, other Chinese carmaker, such as Zeekr and Xpeng, prepares to enter the market directly. The developments suggest Chinese players are shifting from simply exporting vehicles to building a lo