The nation’s automobile market is set to mark an epoch-making figure in import vehicle sales this year as more foreign companies’ expand their marketing and businesses here.
Apart from the big four ― BMW, Mercedes-Benz, Volkswagen and Audi, new competitive players such as Nissan and Jaguar/Land Rover have been fueling the rapid sales growth in Korea.
As a result, there is a high possibility that Korea will see yearly sales of import cars surpass 100,000 units in 2011 for the first time, according to industry sources.
For the first nine months of the year, import vehicle sales came to 79,694 units. More than 26,500 units were sold per quarter on the average so far this year.
“Considering the growing market share of import brands, the 2011 sales are expected to approach 110,000 units,” a local spokesman for a foreign carmaker said.
He said import car sales are estimated to jump more than 150 percent over the past five years. About 40,000 units were sold in 2006.
In addition, following March when monthly sales for the import vehicles hit an all-time high of more than 10,000 units, the monthly figure surpassed 10,000 again in September.
In 2010, a total of 90,562 imported vehicles were sold here, up 48.5 percent from a year earlier.
Foreign carmakers are expected to grab 10 percent of Korea’s automobile market in about a year after they saw the market share surpass 1 percent for the first time in 2002.
Buoyed by active sales of smaller-sized sedans in early 2000s, import vehicles’ combined market share continued to climb to top 5 percent in 2007.
A number of senior figures in the import vehicle industry predict their monthly share of the market will break the 10 percent level in the first half of next year.
Several executives of foreign carmakers’ Korean units have reportedly forecast the timing would be as early as this year. Their market share in the local market reached a record high of 8.73 percent in September.
Recently, European carmakers have been enjoying further sales growth since the implementation of the Korea-EU Free Trade Agreement on July 1.
Companies from Germany, the U.K. and France posted 27.4 percent growth between July and September on a year-on-year basis in the Korean market, data from the Korea Automobile Importers and Distributors Association showed.
Mini Cooper S Countryman
German automakers recorded the highest growth of 28.4 percent, selling 18,602 units during the three months, compared to 14,483 units over the same period last year.
British brands including Jaguar/Land Rover, Rolls-Royce and Bentley sold 1,575 units with growth rate of 27 percent. French companies also saw their sales grow.
Dealers attribute their sales growth to the cutting of vehicle prices as tariffs on import vehicles were lowered under the FTA.
In June, German automakers operating here lowered prices by 1 to 2 percent in expectation of a lower tariff on their imports with the trade pact.
Korea currently levies an 8 percent tariff on European cars but the FTA requires them to be entirely tariff-free by 2016.
Employees for the import brands say they do not anticipate higher profits from the tariff cut, but they expect sales to go up in the medium-term as lower prices certainly appeal to more buyers.
BMW Korea lowered car prices by 1.43 percent in June, which is about 900,000 won ($800) off the BMW 528i sedan priced at 67.9 million won.
Mercedes-Benz Korea made price cuts of 1.44 percent, or 1 million won, for the E300 Elegance sedan and Audi Korea shaved 1.41 percent, or 700,000 won, off the price of the A4 2.0 TFSI Quattro.
Peugeot and Jaguar/Land Rover also followed the case in the local market. Volkswagen Korea began cutting prices for the Golf and CC models in September.
Foreign carmakers saw their sales of small vehicles with an engine capacity of less than 2.0 liters grow by 65.5 percent on a year-on-year basis.
They sold 25,456 units for the smaller segment vehicles during the first seven months of 2011, compared to 15,379 units for the same period last year.
In contrast, sales of import vehicles with engine capacity between 2.0 and 3.0 liters fell from 21,439 to 19,867 units in the local market.
The trend is attributable to high oil prices and a variety of cheaper models introduced by them to compete with sedans of Korean automakers.
The new models include Mercedes-Benz C200, Audi A4, Toyota Motors’ Prius hybrid and Volkswagen’s CC 2.0TDi.
By Kim Yon-se (firstname.lastname@example.org