BMW has taken the No. 2 spot in terms of revenues in Korea for the first time, overtaking GM. According to car sales figures released on Monday, BMW sold W530.8 billion (US$1=W1,139) worth of cars during the first quarter, ahead of GM, which sold W508.1 billion worth.
Only 7,825 BMW cars including Mini and Rolls-Royce were sold here in the January-March period, far fewer than the 29,420 GM vehicles, but they were five or six times more expensive. BMW has no production or assembly facilities here, while GM has a large assembly plant just outside Seoul.
Until now, only the number of imported cars sold was released, but that conceals the phenomenal growth of revenues for foreign carmakers here.
◆ Foreign Carmakers Lead Revenues
In terms of the number of passenger cars sold, Hyundai Motor and its affiliate Kia Motors ranked first with 218,581 in the first quarter, followed by GM, Renault Samsung and Ssangyong.
But in money terms the story is different. Hyundai-Kia came first, but next were BMW, GM, Volkswagen Group (W448.6 billion), Renault Samsung (W415.4 billion) and Mercedes Benz (W347.2 billion), showing that imported brands dominated the top revenue rankings.
The combined first-quarter revenues of three carmakers in Korea -- GM Korea, Renault Samsung and Ssangyong -- stood at W1.203 trillion, far short of the combined revenues of imported brands of W1.782 trillion over the same period.
Imported brands began to overtake domestic rivals in terms of revenues last year. The three German brands -- BMW, Mercedes Benz, Audi and Volkswagen -- all achieved revenues of more than W1 trillion.
◆ Imports Dominate Large Car Segment
Imported brands started outselling Korean cars last year in the premium segment where cars cost more than W50 million. According to Hyundai Motor data, 60,000 imported cars in the premium segment were sold last year, but only 49,000 domestic premium sedans.
Car sales in Korea are projected at 1.58 million vehicles, placing it 12th in the world. But the Korean market for premium cars is ranked among the top five in the world with sales totaling 120,000 units. "Korea is the fourth largest market in terms of BMW 7 Series sales following China, the U.S. and Germany," said Joo Yang-ye at BMW Korea. This makes Korea a very important market for luxury carmakers.
Sales of imported cars in the premium segment surged 207 percent from just 29,000 units in 2008 to 60,000 last year. And the consumer base for imported vehicles has expanded to young Koreans in their 20s and 30s as smaller and more affordable cars become available, which means domestic carmakers are gradually losing market share in their home turf.
To better compete with imports in Korea, Hyundai Motor says it will place more focus on premium sedans. But industry watchers say domestic carmakers will continue to lose market share if they fail to catch up with imports in all aspects including price, performance and brand value.