A local research institute has forecast domestic auto production and exports to decline next year despite an expected expansion in global sales.

In a report on Monday, the Korea Automotive Technology Institute said global demand is projected to slow down in the first half of 2023, before rallying in the second half to reach an expected increase of four-point-seven percent next year at 85-point-three million units.

However, domestic sales are forecast to drop zero-point-five percent on-year to one-point-66 million units next year, while exports are predicted to drop four-point-two percent on-year to two-point-one million units due largely to the impact of the U.S. Inflation Reduction Act(IRA).

The combined effects of reduced domestic sales and exports are likely to lead to a three-percent on-year fall in domestic production to three-point-49 million units.