South Korea: More imported autos to vie in upper markets
Seoul September 7, 2004; Kim Tae-gyun writing for the Korea Hearald reported that foreign carmakers in Korea plan to introduce about 10 new models during the last four months of this year, heating up competition with local makes in higher end market segments, industry watchers said yesterday.
Audi Korea, the Korean arm of German carmaker Audi AG, said it will launch the premium New A6 sedan next month. The car is known as a major inspiration to the design of Hyundai Motor Co.'s New Sonata sedan.
"We think that Hyundai learned a lot from the A6 design to produce the redesigned Sonata sedan.
The A6 models are basically larger than 2.4 liter engine capacity and in a different segment from the Sonata midsize. But we expect people familiar with New Sonata design here will surely look to our sedans," said an Audi dealer in Seoul, insisting on anonymity.
Honda Motor, which launched its top-selling Accord midsize sedan here in May, plans to add an entry-level sport utility vehicle to its product lineup. The new CR-V model expects to vie with similar domestic models, such as Hyundai's Tucson and Kia's Sportage.
Other foreign carmakers planning new launches here this year include Volkswagen, Chrysler, Ferrari and Jaguar, according to import car dealers in Seoul.
Since Korean consumers are becoming more open to foreign-made cars, the imports are quickly emerging as significant rivals to the local players in midsize and upper market segments.
Auto imports during the first eight months of this year jumped 21.3 percent from the same period last year, totaling about 14,400 units. Last year, imports represented less than three percent of the nation's entire auto market.
But experts now estimate that foreign cars account for more than 20 percent of the larger than 2 liter capacity cars here.
"Foreign carmakers, mainly Japanese ones, are quickly moving from the luxury turf. They are now eyeing the 2000cc to 3000cc segment as well. I believe that in three or four years the competition in such markets will further intensify here," said Park Young-ho, an auto analyst at Mirae Asset Securities.
Korean carmakers are mindful of the imports' growing presence. Hyundai Motor said its New Sonata will compete head-to-head with foreign rivals such as Honda's Accord in the premium midsize market segment.
"We will shift our marketing focus to highlight bigger, 2400cc engine versions. One of our primary aims is attracting local customers who otherwise would opt for an imported midsize," said Lee Jong-woo, Hyundai's marketing director, during the New Sonata's launch ceremony on Aug. 31.
Hyundai officials said they invested about 290 billion won to upgrade the company's flagship sedan. They claim its new engine features more power and fuel efficiency than midsize rivals such as Honda's Accord and Toyota's Camry.
The New Sonata model with the premium 2400cc engine sells for 32.63 million won in Korea, while the Accord version with a similar engine is priced at about 33.9 million won here.
According to the August data, BMW and Toyota still top Korea's imported auto sales with a 27.8 percent and 23.9 percent market share respectively. Mercedes-Benz accounted for 10. 9 percent and Honda ranked fourth with 8.3 percent.
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