VW overtakes Mercedes to become 2nd in import market

By Kim Yon-se
  • Published : Sept 9, 2012 - 19:43
  • Updated : Sept 9, 2012 - 19:43
The Volkswagen Passat CC
VW ranked No. 2 in August with rapid on-year growth in sales

Volkswagen, which has the dominant position in Beijing in market share, was not a noteworthy automaker in Korea about 10 years ago.

Though Volkswagen saw its sales ranking gradually rise over the past few years, it has fallen behind the other two German players ― BMW and Mercedes-Benz ― among import brands in Korea.

Last month, Volkswagen ranked second in sales among 24 import automobile brands in the local market, overtaking Mercedes-Benz.

Volkswagen posted 1,829 units in August sales to grab 17.2 percent of the import car market, while sales of Mercedes-Benz stood at 1,645 units with a market share of 15.5 percent.

“Though Mercedes is outpacing Volkswagen in the cumulative figure for the first eight months of 2012 by 13,256 units to 10,785 units, we need to focus on the latter’s growth rate,” said a research analyst for the automotive industry.

On a year-on-year basis, Mercedes recorded a 5.7 percent growth in January-August sales. Volkswagen saw its growth come to 26.7 percent over the corresponding period.

The analyst said that the Passat and Golf series of Volkswagen are gaining growing popularity among Korean consumers.

“As the company is targeting the middle-income bracket as well as the high-income bracket, there is a high possibility that it would overtake Mercedes, whose majority customers are the high-income bracket, in the coming years,” he said.

As a strategy to expand its presence in Korea, the German carmaker plans to increase its “diesel-powered vehicle” portfolio in the coming years.

A Volkswagen Group Korea spokeswoman said, “We believe that the diesel automobile market will continue to grow and more consumers are going to look for cars that are both eco-friendly and fuel-efficient.”

In addition, Audi, a unit of Volkswagen Group, saw its sales in the local market surge around 50 percent from the previous year. Audi Korea is carrying out aggressive marketing strategies in coordination with its parent Volkswagen Group.

Some market insiders forecast that Mercedes will maintain its superior position in Korea, citing its top-class brand image and long-standing rivalry with BMW.
The Mercedes-Benz C-Class

Mercedes-Benz Korea is poised to release several models of the next-generation S-Class, which involves the S350, S500, S600 and S63 AMG, next year.

By country, Korea ranked fourth in the German carmaker’s global sales of the S-Class. Mercedes-Benz Korea sold 2,321 units of the series in 2011.

Import car sales in the local market continued their boom last month although Korean automakers and three foreign companies that operate production factories in Korea are still suffering sluggish vehicle sales.

According to the Korea Automobile Importers & Distributors Association, the nation’s import car sales exceeded 10,000 units for the sixth consecutive month.

The nation’s import car industry, which is continuously expanding, will grow by 40 percent over the next two years, according to KAIDA executives.

They predicted that sales of import vehicles will reach 140,000 units by 2014, from the current level of 100,000 units per year.

Korea saw yearly sales of import cars surpass 100,000 units in 2011 for the first time. Their 2011 sales came to 105,037 units, up 16 percent from 90,562 units a year before.

This year, the association forecasts the 25 import brands together will grab 10 percent of the nation’s automobile market in terms of yearly sales for the first time in history.

On a monthly basis, the import car industry has already attained a milestone 10 percent market share.

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.

KAIDA chief Jung Jae-hee has said the industry “would push ahead with programs, including philanthropic activities, for corporate social responsibility” in the coming years.

He also vowed to enhance quality-based growth, turning from the past position of seeking mere sales growth.

Foreign carmakers saw the market share exceed 1 percent for the first time in 2002.

Buoyed by active sales of smaller-sized sedans in the early 2000s, import vehicles’ combined market share continued to climb to 5 percent in 2007.

European carmakers have been enjoying further sales growth since the implementation of the Korea-EU Free Trade Agreement on July 1, 2011.

Dealers attribute their sales growth to lower vehicle prices as tariffs on import vehicles have fallen under the FTA.

By Kim Yon-se (