German Dominance
The Ministry of Trade, Industry and Energy announced on July 8 that a total of 94,263 imported cars were sold in Korea during the first half of this year, showing a 26.5 percent growth from a year ago and raise foreign automakers’ share in the Korean market to 13 percent.
The rapid growth is led by German carmakers such as BMW, Volkswagen, Mercedes Benz, and Audi. BMW sold 20,268 cars between January and June to record a year-on-year growth rate of 21.0 percent. However, the other three companies outpaced BMW during the period. Mercedes Benz’ sales volume and growth rate amounted to 16,642 and 42.8 percent, respectively. Those of Volkswagen and Audi increased 41.4 percent and 44.0 percent to 15,368 and 13,536.
The gap between BMW and the other three is narrowing these days. On the basis of the June sales volume alone, BMW accounted for 2.4 percent of the Korean automobile market, while Volkswagen, Mercedes Benz, and Audi took up 2.2 percent, 2.1 percent, and 2.0 percent. The difference in the sales volumes of the first and fourth rankers is less than 600 units, too. The four German companies are currently representing more than 70 percent of the imported car market of Korea, given than 12.7 percent of the cars sold in Korea last year were imported.
Under the circumstances, Japanese carmakers are having a hard time in the country. Only Lexus sold 2,917 cars during the period to grow by 11.6 percent, whereas Toyota showed negative growth of 30.8 percent with its sales volume falling to 2,997. Each of Nissan, Infiniti, and Honda sold less than 2,000 cars, although all of them posted double-digit growth.
Industry experts attribute the German automakers’ popularity to the Korea-EU FTA and the high fuel economy of their diesel sedans. The former has been a boon to the price competitiveness of the auto manufacturers, while the demand for diesel sedans has gone up due to a higher interest in fuel efficiency. Their popularity is likely to continue for a while, with carmakers around the world trying to increase their diesel models' presence in the Korean market.