Korean Consumers Shun Chinese-Made Cars

The S90, which was imported to Korea from Sweden until last month, will be all produced in China in accordance with the head office’s factory transfer policy.

Some of Volvo's new flagship models have begun to be produced in China. But many Korean consumers still do not trust cars made in China yet. Thus, attention is being paid to whether or not Volvo Korea will maintain its growth in Korea, shaking off concern in the market.

According to Volvo Korea on September 2, the 2019 model of the S90 launched on January 1 was produced in China. The S90 sold in Korea until last month had been imported from Sweden. The 2019 model is all produced in China in accordance with the head office’s factory transfer policy. The commercial S90 diesel model already sold had already been produced and the S90 gasoline model has not been newly registered since the last one in April.

Volvo plans to first sell the gasoline model of the S90. Last year, 446 units of the gasoline model were sold in Korea.

Geely, the Chinese car producer that holds the largest stake in Volvo, is spearheading the Beijing government’s promotion of the Chinese automobile industry. Geely acquired a 49.9% stake in Proton Holdings, Malaysia's state-owned automobile company, and acquired a 51% stake in British sports car brand Lotus from Proton in May of last year. Early this year, the Chinese automaker became the largest shareholder of Daimler by buying a 9.69-percent stake in Daimler, the parent company of Mercedes-Benz.

Chinese-made cars have already suffered a setback in the Korean market. Last year, CK Motors created a sensation by importing a Chinese-made SUV for the first time in the Korean car market. However, the sensation short-lived and ended up being a storm in a teacup. CK Motors imported the SUV Kenbo 600 at the time and sold 321 units of the model last year. The sales volume was about 10% of the company’s initial sales target of 3,000 units. CK Motors launched the model in Korea in January of last year and sold out the initial volume of 120 units in February and March. But the model’s sales plunged beginning in May. CK Motors renamed itself Shinwon CK Motors and is seeking to make a comeback with Chinese-made plug-in hybrid electric vehicle (PHEV) SUVs.

“It is too premature to judge whether or not Chinese-made Volvo vehicles have succeeded in Korea as their sales are still in their early stage,” said an official of the Korean automobile industry. "If Chinese-made Volvo vehicles succeed in Korea, it will change Korean consumers’ perception of Chinese-made cars."

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