South Korea: Market share for foreign cars rises

Korea JoongAng Daily - With Korea’s economic recovery, sales of imported cars surged last year.

Competition is expected to become fiercer this year as domestic and foreign automobiles introduce more models in Korea as revealed during the current 2011 Seoul Motor Show.

Foreign car brands are expected to achieve a market share of more than 10 percent this year for the first time as customers are attracted by greater variety of more affordable models.

Ian Robertson, head of BMW Group’s sales and marketing, told reporters yesterday that the German automaker is hoping to sell more than 20,000 units in Korea this year.

BMW Korea President Kim Hyo-joon told the Korea JoongAng Daily that this year’s local target would be around 25,000 units, including BMW Mini.

BMW is the most popular foreign car brand in Korea, with sales last year rising by 72 percent to 19,036 units from 11,073 units sold in 2009.

Robertson said BMW will also seek to compete in the Korean market for electric vehicles with its introduction of two electric cars, the i3 and i8, in 2013.

He said Korea was already BMW’s fourth-largest global market for the luxury 7 Series, while adding that BMW was addressing complaints about poor after-sales service and the high price of vehicle parts.

Mercedes-Benz Korea has set a sales target of more than 16,000 vehicles, while Audi Korea is aiming for 10,000 units, up from nearly 8,000 units sold last year. Ford Korea, which sold 4,500 vehicles last year including the popular Mustang, is hoping to boost sales with the introduction of four new models, including the Focus and the Fusion.

“Sales of imported cars this year will likely exceed 100,000 given the current strong momentum, but I think predictions that they will achieve a market share of 10 percent may be premature,” said Yoon Dae-sung, executive managing director of the Korea Automobile Importers and Distributors Association. “Last year, imported cars had 50 percent sales growth coming off a low base in 2009 due to the financial crisis. I predict sales growth for foreign cars will be around 20 percent.”

But the recent earthquake and tsunami in Japan could affect foreign car sales this year. Not only have Japanese automakers, including Toyota, Honda and Nissan, temporarily suspended much of their production in Japan, but other foreign carmakers could be affected since they are partly dependent on Japanese car components.

Robertson said BMW was closely monitoring any possible supply disruptions from Japan, but said its Korean operations would not be immediately affected since it has enough supplies in stock to last at least a few weeks. He added that Korean auto parts companies, such as Hyundai Mobis, could emerge as alternative suppliers. Other foreign carmakers, including Mercedes-Benz, said they saw little impact from the earthquake.