Contrary to General Trend
The Korea Automobile Manufacturers Association (KAMA) and the Korea Automobile Importers & Distributors Association (KAIDA) announced on February 12 that South Korea imported 60,174 cars, up 22.5% from a year earlier, from the US last year to break the 60,000 unit mark for the first time. During the same period, South Korea’s total car imports from the US fell 8.3% from 331,858 to 304,375.
The increase in the import of cars from the United States was led by an increase in GM Korea’s OEM sales, which almost doubled from 6,961 to 12,053 between 2015 and last year. In the meantime, Ford sold 11,220 cars in the South Korean automobile market last year. GM Korea’s OEM policy in the market has been applied to Impala and Camaro SS and is about to be applied to the Bolt EV and the SUV to replace the Captiva.
Last year, U.S. automakers such as Ford, Chrysler and Cadillac sold 18,291 cars in total in South Korea to hit a record high and increase their share in the market by 0.9 percentage points to 8.1%. With the Volkswagen scandal involving diesel cars still going on and an increasing number of customers showing their preference for gasoline vehicles, the popularity of U.S. cars is likely to continue to rise for the time being in the South Korean market.
Meanwhile, South Korea’s car exports to the U.S. fell 9.5% from 1,066,164 to 964,432 last year, the first year of zero tariff resulting from the KORUS FTA. The annual export volume declined for the first time in seven years. Specifically, the exports by Hyundai Motor Company and Kia Motors decreased 18.9% from 823,542 to 668,232 due to an increase in their production in the U.S. The exports by the two companies are likely to keep falling in that they are planning to invest US$3.1 billion in the U.S. to further increase their local production volume.