Dynamic import car market, Hyundai’s powerful dominance attract iconic leaders in car industry


Big names in the global auto industry have been flocking to Korea recently.

Starting with the surprise visit by Toyota Motor CEO Akio Toyoda in January, Renault-Nissan Alliance chairman Carlos Ghosn announced a new investment plan in Korea in July and Ford Motor’s CEO Alan Mulally last week renewed commitment to the Korean market. On Tuesday, Torsten Muller-Otvos, CEO of Rolls Royce Motor Cars, is also scheduled to visit Seoul.

Industry watchers say Korea is one of the most dynamic markets in the Asia Pacific region, where car deliveries continue to grow.

“Korea may be a small market of 1.5 million annual car sales. But the market never stops evolving and its import car market, in particular, still has full potential to further grow,” said Kim Pil-soo, professor at Daelim University College and auto expert.

Korea saw yearly sales of import cars surpass 100,000 units last year for the first time. Their market share currently at around 10 percent is expected to increase to 15 percent in the near future.

Kim also added global leaders in the auto industry would not hesitate to visit Korea, home of their emerging rival Hyundai Motor Group.

“The CEOs may also want to check the Korean market, where their global rivals Hyundai and Kia take up almost 80 percent. If they succeed in expanding presence first in Korea, they would gain more momentum in overseas competition with Hyundai.”

The three carmakers ― Toyota, Renault-Nissan and Ford ― whose chief executives visited Korea this year are facing increasingly fierce competition with Hyundai and Kia vehicles as they vie mainly for smaller and more affordable segments globally. In Korea, they also compete to impress Korean drivers in the import car market where German makers are still dominant.

In January, Toyota CEO Akio Toyoda selected Korea for his first overseas business trip since the Japanese carmaker was hit hard by last year’s tsunami. 

“I wanted to thank Koreans for their support after the earthquake and announce Toyota has been reborn since then,” he said, introducing the new Camry, Toyota’s flagship sedan, at a Seoul hotel in person.

And the CEO’s visit seems to have helped Toyota’s Korean unit recover sales it had lost in recent months. The new Camry sold 3,292 units in the first seven months this year, becoming the second-best-selling import car model in Korea as of July.

“The CEO’s visit can be said as one of the sales boosters for the Camry and other Toyota vehicles in general,” said Kim Sung-hwan, a Toyota Korea spokesperson.

“Within Toyota, Korea is considered one of the most advanced markets. By meeting the high expectations of the selective Korean customers, we also expect to enhance our competitiveness.”

The July visit by Renault-Nissan Alliance chairman Carlos Ghosn also came as surprise. At the time, the 58-year-old legendary Renault chief unveiled a rescue plan for the ailing Korean unit Renault Samsung Motors. 

“We were just napping,” he said of RSM’s recent sluggish sales. “But now a wake-up call is ringing loudly that raises a need for us to improve competitiveness significantly.”

He announced a 170 billion won ($160 million) investment plan in the production of 80,000 next-generation Nissan Rogue crossover sport-utility vehicles at RSM’s Busan plant.

His rescue plan, however, was not good enough to satisfy industry watchers here, as it did not contain plans to revive the Korean unit more fundamentally such as with new product line-ups. Adding to the concerns, the carmaker started a voluntary redundancy program in early August.

Ford Motor’s CEO Alan Mulally ― the highest-paid executive in the industry ― was the most recent global auto CEO to visit Korea on Friday.

It was the first visit by a Ford chief since the Dearborn, Michigan-based carmaker started Korean operations in 1996. He flew in from China, where Ford had broken ground on a new $760 million plant.

He pledged to support the Korean operation with the introduction of new vehicles and to take advantage of the free trade agreement between Korea and the U.S. more actively even though Korean journalists expressed disappointment at his “empty hands.”

“Until recently, we had limited production line-ups available here. But the free trade agreement between Korea and the U.S. has now enabled Ford to import more vehicles to customers,” he said, adding the FTA is a very important part of reducing car prices.

Kim of Daelim University pointed out that more global CEOs will visit Korea to renew their brand awareness in Korea and encourage local operations in competition with their global rivals.

“The European car market shows no sign of recovery, while China, now the biggest market for sales, takes a breather. This year they will try to prevail more in Korea and other Asia Pacific countries,” he said.

By Lee Ji-yoon (jylee@heraldcorp.com)