Imports accounted for more than 10 percent of cars sold in Korea during the first 10 months of this year. If the trend continues, the proportion of imported cars in Korea by the end of the year is expected to exceed the all-time record share of 10.6 percent in Japan, which opened its car market 21 years ahead of Korea.
The Korea Automobile Importers and Distributors Association on Sunday said imported car sales totaled 107,725 units from January to October of this year, up 22.5 percent from the same period a year ago.
Imports now account for 10.1 percent of automobiles in the country. Their market share in October was even higher at 10.5 percent, up from only 8 percent in the same month last year.
The market share of imported cars in Japan excluding subcompacts peaked at 10.6 percent in 1996, at the height of a bubble. When the bubble burst, their market share fell to the 7-8 percent range. "The imported car market trend in Korea is very similar to the trend in Japan between the boom years of 1983 to 1996," a KAIDA official said.
Meanwhile, Hyundai Motor and affiliate Kia Motors are feeling the pinch. The automakers have launched a special taskforce headed by Hyundai Motor vice chairman Chung Eui-son to deal with the relentless onslaught of imported cars.
"Unlike Japan, sales of imported cars will continue to grow in Korea," a member of the taskforce said.
The first reason is bigger tax benefits under free trade agreements with the U.S. and EU. Another factor is the wide variety of imported cars of around 140 models available here, compared to only 40 from domestic carmakers.
In Japan, local carmakers offer a similar line-up of cars of 180 different models as import brands' 170 models.
Foreign car manufacturers are also boosting sales in Korea by cutting prices to less than 150 percent of their Korean rivals'.