September 09, 2019 10:39
Deteriorating Seoul-Tokyo relations have led to sales of Japanese automobiles here declining by half, prompting Nissan to consider pulling out of the Korean market altogether, according to the Financial Times on Friday.
A Nissan Korea staffer downplayed the report as mere "speculation," but industry insiders do not completely rule out the scenario.
Toyota, Honda and Nissan all have sales subsidiaries in Korea, but Nissan is suffering the brunt of a boycott of Japanese products.
It was about to embark on a major marketing blitz here in July to pitch a face-lifted Altima sedan, the only imported mid-sized car priced around W20 million and its bestseller here (US$1=W1,196).
But the boycott forced Nissan to launch the car without fanfare and halt marketing activities. Its sales performance in Korea in July and August was extremely disappointing, falling from more than 600 cars a month including the Infiniti to 359 in July and 115 in August, down 82 percent on-year.
Unlike Toyota and Honda, which steadily make money in Korea, Nissan racked up W37.4 billion in losses here since 2016 and is now suffering severe capital impairment. The fact that it is in the midst of restructuring its global operations is also fanning rumors of a pullout from Korea.
Its worldwide second-quarter earnings declined 98 percent compared to the same period last year, and nine percent of global staff or 12,500 workers will be laid off over the next three years.
While many Japanese companies have brushed off Korea's boycott, some businesses are being hit hard, and the pullout would also affect Nissan's Korean staff and dealers.
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