Slow Sales of Imported Cars
A brake was put on rising imported car sales in Korea. The Korea Automobile Importers and Distributors Association (KAIDA) announced on February 4 that the number of new imported cars registered in January stood at 16,234, an 18.5 percent drop from a year before. This figure is 33.4 percent down from 24,366 in December, 2015. This year-on-year drop is the first in five years since December 2011.
“Imported car sales in January declined from a year earlier due to the end of a lower individual consumption tax, a scarcity of some brands and a slow season,” explained Yun Dae-sung, an executive director at the KAIDA. By brands, Mercedes-Benz ranked first with 4298.
BMW sales fell 19.9 percent year on year to 2410 units although the automaker came in first in imported car sales last year. Audi and Volkswagen that will make the largest-ever recall due to the emission device rigging scandal inked only 1900 and 1660 which are 46.5 percent and 44.7 percent drops from a year before.
The imported car industry said in unison that the drop is not a big shock to them since they predicted a domestic consumption cliff due to a sales increase backed by massive year-end promotions and the end of a lower individual consumption tax. Besides, they predicted that imported car sales will slow down compared to previous years but continue to grow. The KAIDA forecast that the Korean imported car market will grow 8.5% year on year to 255,000 units this year.
It was forecast that the growth of the Korean imported car market will slow down with a single-digit growth rate this year although it has recorded double-digit growth rates for six straight years since 2010. According to the KAID, the main causes for the slowdown include the weakened consumer confidence due to low growth, young consumers’ weakened buying power and the end of a lower individual consumption tax.