Car Importers Rev up for Sales Rebound

  • By Kim Seung-bum

    May 18, 2017 11:09

    Car importers are making aggressive marketing bids after the first decline in sales in seven years last year.

    Sales of foreign cars also dropped 4.5 percent in the first four months of this year compared to the same period of 2016, and unless importers pull themselves together they stand to suffer a second year of declining sales for the first time since the 1997 Asian financial crisis.

    One staffer with a foreign automaker said, "Everyone is offering discounts" including zero-interest installment plans.

    They have also bolstered their lineups of SUV, which are all the rage in Korea these days. Nine new imported SUVs have come on the market here since early April, accounting for half of all new foreign models launched in that time.

    Last year, SUVs accounted for only 30 percent of new cars to hit showrooms here. But in April, Mercedes-Benz beefed up its SUV lineup to seven with the new GLC coupe, and Cadillac relaunched its Escalade large SUV here after an 11-year hiatus. Jaguar Land Rover plans to start selling the latest its new luxury Discovery SUV in July.

    Imported car sales here fell 7.6 percent last year to 225,279 units. The last time sales in Korea declined was back in 2009, just after the global financial crisis, and then only 1.1 percent.

    That means last year's was the biggest drop since 74.5 percent in 1998, but in those days the volume was much smaller and the decline looked more drastic. In all other years importers posted double-digit sales growth.

    Korean automakers fought back with new models. Hyundai rolled out the new Grandeur sedan last November and achieved monthly sales of 10,000 until last month. Renault Samsung's SM6 midsize sedan also hit showrooms last year and sales in the first quarter of this year surged 73.2 percent on-year.

    But the main factor dragging down overall import sales was declining sales at Volkswagen, which was impacted by a massive emissions-rigging scandal and a temporary halt of sales here.

    Lee Hang-ku at the Korea Institute for Industrial Economics and Trade said, "This year marks the 30th anniversary of Korea's full opening of the car market, and cumulative sales of imported cars reached 1.5 million last year. But the days are gone when imported cars were guaranteed bestsellers. They'll have to boost investment in Korea and bolster service quality to secure more customers."

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