Monday, October 30, 2006

Korea's Foreign Carmakers Raise 2006 Sales Goals

The growth of imports in Korea intrigues me. Specifically, why foreign brands do well, despite huge VAT (value added taxes). Status is but one aspect.

Korean media note:
Foreign carmakers operating in Korea have raised their sales target for the year.

Amid consumers' affection for imported cars, 21 foreign carmakers, including BMW and Ford, said they expect combined sales to surpass their initial target of 34,500 units to reach 40,000 units or more.

About 30 new imported models have been or will be unveiled in the second half of the year. The Korean Automobile Importers and Distributors Association (KAIDA) predicts their market share to be 5 percent of the domestic market in 2007.

Foreign automakers hold a combined market share of 4.2 percent as of September, up from 3.2 percent at the end of 2005.

Honda Korea sold 400 CR-Vs, a new sport utility vehicle, in 15 days after releasing it on Oct. 12 and Nissan Korea sold some 200 New Infiniti 35s in 10 days.

Officials in the imported automobile industry say the combined number of imported car sales here will increase by 60-70 percent over the next five years to reach as many as 50,000 in 2010.

[One reason Why]
Import car officials say growing sales reflects a favorable local view on foreign cars. The formerly negative sentiment about imported vehicles lies mostly in expensive consumer prices, an executive of Ford Sales & Service Korea said. Now the unfavorable sentiment is fading as prices have diversified.

He said now is the time for foreign carmakers to unveil more low and mid-priced models to acquire a bigger market share.

Many foreign carmakers advanced into the Korean market between 2000 and 2005, by setting up local branches, such as Audi Korea, Volkswagen Korea, Honda Korea and Nissan Korea.

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