Japanese Cars Losing South Korean Market

Japanese automakers’ market share in South Korea dropped to 1.1 percent last year. This is because of their declining attractiveness as well as the boycott of Japanese products that started in 2019.

According to the Korea Automobile Importers & Distributors Association, Lexus, Toyota, Honda, Nissan and Infiniti sold about 20,500 cars in South Korea in 2020 while more than 1.89 million cars, including over 270,000 imported cars, were sold.

The association has provided the statistical data since 2001 and 2020 is the first year when the Japanese brands’ market share according to the data dipped below 10 percent. Those brands accounted for 35.5 percent of the South Korean market in 2008, sold more than 30,000 cars in the market in 2016, and increased the number to 45,253 in 2017. In 2019, they sold 36,661 cars in spite of the boycott.

According to the Korea Automobile Manufacturers Association, an all-time high of approximately 1.9 million cars were sold in South Korea last year. Despite the pandemic, Hyundai Motor Group increased its sales volume by 6.2 percent, Mercedes-Benz sold more than 70,000 cars for the second consecutive year, the sales volume of BMW jumped 32.1 percent and that of Audi and Volkswagen more than doubled.

Experts point out that the poor performance of the Japanese brands in the growing market is because their products are not attractive in terms of design, convenience, innovativeness, etc. “The design and quality of South Korean cars are improving fast while the design of Japanese cars is failing to attract South Korean consumers,” the HI Investment & Securities research center explained, adding, “In addition, the Japanese automakers are showing a slower pace of innovation these days.”