According to industry sources on Oct. 4, the inventory rate of imported vehicles increased 72.8 percent to 54,781 units between Jan. to Aug. this year, from 31,702 units a year earlier.
The total stock of imported cars had increased from 7,774 units in 2011 to 18,480 units in 2012, 29,816 units in 2013, and 62,980 units last year.
For this year, the figure far exceeded 50,000 units in Aug., and is likely to reach 80,000 units by the end of this year at its current rate.
Also, the inventory rate of imported vehicles, meaning the percentage of cars sitting unsold, stood as low as 6.9 percent in 2011, but recorded 25.7 percent in Aug. this year, the highest figure ever recorded on an annual basis. The figures were 12.4 percent in 2012, 16 percent in 2013, and 24.3 percent last year.
An inventory rate of imported cars refers to the rate of unsold stock after importing. Until now, car importers have not reduced the amount of imports, though inventories have kept increasing. This is because their strategy to flood the domestic market with products has worked in some degree. With a public belief that imported cars are always good even with high prices, domestic consumers have bought many imported cars.
However, imported cars, which have been selling like hotcakes, are suffering a bitter blow in the domestic market due to the Volkswagen scandal. Sales of Volkswagen and Audi suffered the most. In addition, other imported automakers, including Mercedes-Benz and BMW, are directly and indirectly affected by the current negative atmosphere against imported cars.
Car importers have been disposing of stocks by increasing discount rates, as they see the steady increase in inventories. However, they cannot conduct any promotional activities at the moment due to the Volkswagen scandal. Until now, retail stores of imported cars have been competing to secure supply, but they need to reduce excessive stocks now due to the current stagnant sales of imported cars.
An official from a car importer said, “Due to the Volkswagen’s cheating on fuel economy tests, the domestic imported car market is in a bad condition and inventory is continuously increasing. Therefore, we are experiencing pressure from management.”