Sunday, November 25, 2007

Update: Korean Car Import Market

Imports are a small part of the South Korean car market. Hyundai-Kia, followed by GM Daewoo, Renault-Samsung, and Ssangyong dominate domestic car sales. However, imports look to make inroads.... Despite high costs and hefty Value Added Taxes (VAT) many Koreans put national loyalty aside and buy imports. Status, image, and quality are key factors.... This Korea Herald article gives a nice snapshot into the dynamics of the import car market ( Honda, Saab, Land Rover, Mercedes Benz, Jag, Audi, Toyota, and VW.)

Honda signs on dealer in Gwangju
Honda Korea announced on Tuesday that it has signed a dealership agreement with J-one Motors, a subsidiary of the Jungheung Construction Co. This will be Honda Korea's ninth regional dealership and its first in the Jeolla Provinces. J-one Motors' showroom is scheduled to open in June next year. Honda Korea currently has six dealers -- in Seoul, Busan, Incheon and Gyeonggi Provinces. Two additional dealerships are scheduled to open next year in Daejeon and Daegu.

Saab new 9-3 lures younger drivers
The new Saab 9-3 was launched here on Wednesday. According to GM Korea, the 9-3's local price has been lowered to increase its appeal to younger drivers.

On the local market, the vehicle is available with a 2-liter or a 2.8-liter gasoline engines that generate 210 and 255 brake horsepower, respectively. The 2-liter engine has a fuel economy of 10.2 kilometers per liter, while the larger engine can travel 8.7 kilometers on one liter of fuel. The 1.9-liter diesel version of the car is not yet available in the country.

The 2-liter version is priced at 36.9 million won ($39,600), and the 2.8-liter version comes with a price tag of 54.5 million won.

New C-Class comes to Korea
The new Mercedes-Benz C-Class was launched in Korea on Thursday. The latest version of the compact sedan is six centimeters longer and four centimeters wider than its predecessor, and has been equipped with a host of safety systems including the adaptive brake system, Mercedes-Benz officials said.

Local prices for the vehicle range from 46.9 million won ($50,000) to 57.9 million won, depending on the trip level. Locally available trip levels are the C 200 K Elegance, C 200 K Avantgarde, C 220 CDI Elegance and C 230 Avantgarde.

Free check-ups on Jaguars, Land Rovers
Premier Automotive Korea, the local sales representative of Jaguar and Land Rover vehicles, will be operating a free check-up service beginning today. The free service campaign will run through Dec. 8, the company said.

During this time, the company will provide free check-ups in 31 categories, including on batteries and heating systems. The company will also be offering a 10 percent discount on parts and accessories for the Jaguar and Land Rover vehicles.

Volkswagen to challenge rival Toyota with SUVs, vans
Volkswagen AG, Europe's largest carmaker, plans to ratchet up the competition with Toyota Motor Corp. by offering more vans, pickup trucks and sports utility vehicles.

"In this area, we haven't done enough, but we're stepping on the gas," chief executive officer Martin Winterkorn said in an interview with Germany's monthly Manager Magazin. Spokesman Andreas Meurer confirmed the statement.

Volkswagen, based in Wolfsburg, sells about the same number of traditional passenger cars such as sedans and hatchbacks, but lags far behind its Japanese competitor, the world's No. 2 automaker, in SUVs, vans and trucks. Toyota, which builds the Tundra pickup in Texas, makes about three million more vehicles per year than Volkswagen, which offers no pickup in the United States.

"To be a true volume player in the auto market, one has to be engaged in all aspects of the business," said Stephen Pope, chief global market strategist at Cantor Fitzgerald in London. "VW has proven its success in regular passenger cars; however, in other areas, the firm has several blind spots."

Winterkorn has said that he wants to introduce 12 new models over the next three years, as part of a plan to increase sales to eight million vehicles. Among the new offerings are a Volkswagen brand compact SUV called the Tiguan, a minivan for the U.S. market built with Chrysler LLC, and two new compact SUVs from the luxury unit Audi.

'Rivals Pulling Away'
Winterkorn, who took over as chief executive on Jan. 1, previously ran the carmaker's Audi brand. One of his first decisions as Audi chief was to build the Q7 SUV, which has become one of the unit's best-selling vehicles.

"Martin Winterkorn is on the right track with his plans in these areas, and it is necessary to get out into the public domain as soon as possible, as key rivals are pulling away," Pope said. "He is a driven CEO, and I fully expect to see new models in these new areas catching the eye as the 2008 auto season gets going."

Volkswagen plans to enhance its cooperation with Porsche SE, Volkswagen's largest shareholder, in areas such as sales and marketing, Winterkorn also said in the interview. (Bloomberg)

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