German Carmakers Battle It Out in Korea

      May 17, 2014 08:02

      The Korean market for imported cars is growing more than 25 percent a year, surpassing other markets here by a huge margin. In March, a record 15,777 imported cars were sold in Korea, and a month later the record was shattered with 16,700.

      At the center of the explosive growth are the three biggest German carmakers: BMW, Mercedes-Benz and Volkswagen, which account for 54 percent of the foreign car market in Korea.

      BMW, Mercedes-Benz and Volkswagen saw sales surge 31 percent in the first four months of this year compared to the same period of 2013. Competition between the three brands is intense, with BMW's traditional dominance being seriously threatened.

      At the helm here are BMW Korea CEO Kim Hyo-joon, Mercedes-Benz Korea CEO Britta Seeger and Volkswagen Korea CEO Thomas Kuehl.

      From left, Britta Seeger, Kim Hyo-joon, and Thomas Kuehl

      Seeger has been trying to attract younger Korean consumers since she was appointed CEO in March last year, introducing compact models including the sleek compact A Class and four-door CLA coupe rather than relying on big sedans. In the second half of this year, Mercedes-Benz will start selling the compact GLA SUV here.

      Kim at BMW is focusing on future growth engines like the i3 electric model. The i3 is built largely from carbon-fiber materials, while its interior is upholstered with natural fabrics.

      Volkswagen's Kuehl has his sights set on utility. This can be seen in his decision to introduce the XL1 plug-in hybrid model in February, which can run more than 100 km on just a liter of diesel. Although no date has been set for sales, Volkswagen held launch events for the car in nine Korean cities.

      Their battles have not been without consequences. Last month, the Mercedes-Benz E220 CDI sedan overtook the BMW 520d to become the top-selling imported car in Korea. A total of 628 E220s were sold last month compared to 599 520ds.

      Volkswagen's compact Tiguan SUV has been catching up quickly with BMW.

      Mercedes-Benz saw its monthly sales surpass 3,000 vehicles in April for the first time ever in Korea and now accounts for 19.8 percent of the Korean market for imported cars, just 1.9 percentage points behind BMW.

      "If this trend continues, it could dent CEO Kim Hyo-joon's reputation for keeping BMW at the top for 14 years," said one industry insider.

      The leadership styles of the two German CEOs is also getting a lot of attention. Kuehl, a former soccer player, had each Volkswagen Korea employee drive all of its cars for a month since he was appointed in September last year, because he wanted them to be thoroughly familiar with the products they are flogging.

      Seeger visited each Mercedes dealership and service center nationwide to listen to the ideas of her staff during her first three months as CEO.

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