March 16, 2015 08:20
A growing number of Korean consumers in their 30s are taking a shine to imported cars.
The Chosun Ilbo analyzed automobile purchasing patterns based on statistics from the Korea Automobile Manufacturers Association and Korea Automobile Importers and Distributors Association and found that in 2010, 95.1 percent of new car buyers in their 30s opted to buy Korean brands.
But last year, only 84.5 percent bought Korean brands. People in their 30s are the fastest-growing group of buyers of imported automobiles.
◆ Imports Getting Cheaper
There are two main reasons behind the trend -- an increasingly wider variety of imported cars are available here and they are becoming more affordable. In fact, there are 65 imported car models priced between W20 million and W40 million, which customers in their 30s can afford, marking an increase of 20 models compared to five years ago (US$1=W1,129).
Younger consumers are buying imported cars to stand out from the crowd. Kim Ki-chan at Catholic University said, "A growing number of consumers in their 30s want to spend their money on cars rather than save up to buy a house. Automakers mostly target young consumers who tend to prefer style to practicality, which means domestic automakers may have a tougher time selling their cars."
The most popular model among 30 somethings is the Volkswagen Tiguan compact SUV. It was the top selling imported car last year overall, but customers in their 30s account for 35 percent of all Tiguan buyers.
The German automaker's popular Golf hatchback, which was the fourth best-selling import last year, is also popular among 30 somethings, who accounted for 41 percent of all customers.
After-sales service offered by car importers has also improved. BMW, Mercedes-Benz and Volkswagen, which are the top three foreign carmakers in terms of sales here, have more than 100 service centers across the nation. BMW and Audi plan to add 10 more this year.
◆ More Affordable Compacts
Industry watchers say a widening gap between the rich and poor is another reason for the statistics. While some customers in this age bracket buy imports, most are buying no new cars at all.
One 36-year-old office worker who recently bought a used car for W9 million said, "Home prices are so staggeringly high these days that I can't even think of buying a new car."
Cho Cheol, a researcher at the Korea Institute for Industrial Economics and Trade, said, "The disposable incomes of 30 somethings are shrinking, so they are reluctant to spend."
As a result, domestic automakers are struggling to come up with new marketing strategies. One is to offer new hire-purchase programs. Hyundai and affiliate Kia are offering low-interest installment plans for the Morning subcompact or Avante compact. They are also rolling out more affordable compacts. Renault Samsung's QM3 and Ssangyong's Tivoli small SUVs are prime examples.
Not to be outdone, Hyundai also rolled out a cheaper version of its Tucson small SUV.
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