Imported cars are beginning to pose a serious threat in the domestic market, even outselling their rivals in some classes.

According to sales figures for January and February compiled by the Chosun Ilbo on Thursday, the Volkswagen Golf took the No. 1 spot among mid-size hatchbacks with sales of 1,040 units. In the same period the Kia Forte hatchback sold 656 units and the Hyundai i30 544 units.

The Golf topped the list once in September last year, but soon dropped before regaining the lead in the first two months of this year.

Imports have nearly caught up in the luxury sedan class as well. Hyundai sold 697 units of its Genesis in February, but it was closely tailed by the BMW 5 series and Mercedes-Benz E-Class with sales of 683 and 660. The German cars outpaced Hyundai's Equus with 472 and the Ssangyong Chairman W with 309.

The major reason for the catch-up is price competitiveness. While Korean automakers continue to raise prices when they launch improved models, foreign brands have frozen or even reduced prices for new models with updated designs and better quality.

The Golf 1.6 Diesel, which costs around W31.9 million (US$1=W1,120), boasts fuel-efficiency of up to 21.9 km/l, much better than the Hyundai i30 Diesel at 16.5 km/l. Market researchers say the Golf also features a more luxurious interior as well as better driving performance.

Hyundai, meanwhile, is expected to raise the price of its upgraded new Genesis which is to be rolled out this month.