The number of cars produced in domestic factories was 3,951,000 in 2019, down 1.9 percent from the previous year, according to the Ministry of Trade, Industry and Energy.
It was attributed to the adjustment in some of local plants, partial strikes of GM Korea, a local unit of U.S. carmaker General Motors, and a fall in production of Renault Samsung.
The number of vehicles sold here was 1,781,000 last year, down 1.8 percent from a year earlier.
It came as the local sale of Japanese vehicles almost halved in the second half amid the trade spat between South Korea and Japan.
Japan tightened control in July over its export to South Korea of three materials vital to produce memory chips and display panels, the main stay of the South Korean export.
In August, Japan dropped South Korea off its whitelist of trusted trading partners that are given preferential export procedure. In response, Seoul removed Tokyo from its whitelist of export partners.
South Korea believed that Japan's export curbs came in protest of the South Korean top court's rulings that ordered some of Japanese companies to pay reparation to the South Korean victims who were forced into hard labor without pay during the 1910-45 Japanese colonization of the Korean Peninsula.
The domestic sale of Japanese cars rose 10.3 percent in the first half, but it tumbled 45.0 percent in the second half.
The number of exported vehicles dipped 1.9 percent over the year to 2,402,000 in 2019 on the back of the global economic slowdown.
Auto parts export reduced 2.5 percent to 22.55 billion U.S. dollars in the year.