Consumers in their 20s have become a formidable force in the Korean market for imported automobiles.
According to the Korea Automobile Importers and Distributors Association on Sunday, 55,698 individual consumers bought imported cars last year. Among them, 4,801, or 8.6 percent, were in their 20s, surpassing the proportion of customers in their 60s (7.8 percent) for the first time.
Although they lag far behind customers in their 30s to 50s, buyers of foreign vehicles in their 20s are increasing rapidly, with the number having grown by the fastest rate (36 percent) among all age groups from 2010.
"We still see a lot of customers in their 20s whose parents pay for the cars, but the trend is changing," said an employee at a Volkswagen dealership in the affluent Gangnam area of southern Seoul when asked to describe the constitution of young buyers. "Young professionals are emerging as the new power consumers."
A 28-year-old woman identified by her surname Lee who works at a state-run institution is a prime example of the new kind of consumer. She purchased a German automobile for around W30 million (US$1=W1,122) at the end of last year despite her parents' opposition. They told her she should save her money to buy a house, but Lee thought differently.
"I would barely be able to afford a house even if I saved my entire salary for decades, so I felt it would be more realistic for me to buy a car I want," she said.
One of the main reasons for the growing number of younger buyers of foreign cars is the narrowing price gap with Korean brands. It now costs more than W15 million to buy a Korean subcompact, while a greater number of imported compacts are available in the W20 million range.
In fact, more cars with engine displacements of less than 2,000 cc were imported last year than in the past. Until 2010, their numbers accounted for 32 percent of all imports, but this figure rose to 41 percent last year.
Among customers who purchased the Nissan Cube (W21.9 million) last year, which is the cheapest imported car in Korea, 70 percent were in their 20s and 30s (1,524 customers).
Meanwhile, the availability of monthly installment programs has helped make imported cars more affordable. Under such programs, consumers can pay just 30 to 40 percent of a car's price up front and settle the balance over a period of up to 36 months, with monthly payments as low as W100,000.
For the subcompact BMW Mini, which is very popular among Koreans in their 20s, more than half of its total customers here have purchased the car with installment payment programs.
"We do have some young entrepreneurs who pay for the car in cash, but most of our customers opt to pay in installments," said a local BMW staffer.
According to Yoon Dae-sung, executive director at KAIDA, imports have been embraced as old ways of thinking have receded.
"Young customers -- especially those born after 1987 when Korea opened its doors to foreign car imports -- do not have any aversion toward imported cars," he said. Yoon was referring to the traditional perception of imported cars as luxury items reserved only for wealthy and older customers, or the idea that it was unpatriotic to purchase foreign-branded cars.