Sales of imported cars hit a record for the third month running, while domestic carmakers are seeing sales slow. Foreign cars now account for 8.3 percent of the market, up from 6.5 percent over the same period last year.

The Korea Automobile Importers and Distributors Association said on Tuesday that 11,708 new foreign cars were registered in May, up 9.7 percent from the previous month and 33.4 percent higher than the same month last year.

"A lot of price-competitive new models are being imported after free trade agreements with the U.S. and EU went into effect," said Yoon Dae-sung at the association. "The rising sales of imported cars contrast with slowing sales of Korean-made automobiles."

Corporate clients account for 40 percent of imported car sales and are one of the main reasons behind the surge. Private business owners and companies are taking advantage of the lower cost of leasing imported cars and charging the fees to their expense accounts. This has led to calls to put a limit on the amount that can be charged to expenses to lease foreign cars.

Fuel-efficient diesel cars are among the most popular imports. Seven of the top 10 best-selling models in May were diesel vehicles like the BMW 520d, Audi A6 TDI and Volkswagen Golf and Tiguan. Diesel cars accounted for 50 percent of all imported cars sold in March for the first time and in May that rose to 53.4 percent. In 2005, diesel cars took up only 4.1 percent of imported cars sold here, but this has changed drastically.