Blogs

Home | Blogs
Korea Under the Siege of Japanese Cars
Oct 26, 2007

Japan is all set to make its grand entry into  South Korea, amidst of a growing demand for foreign cars in the country according to Nissan Motor.

In the midst of a growing demand for foreign cars in South Korea, one of Asia’s biggest auto markets, Japan is all set to make its grand entry into it. In a press conference held by Nissan Motor in Seoul on October 9, the company announced that in a year’s time, it would have an active presence in the Korean car market, according to report of
The Hankyoreh.

Come 2008 and Mitsubishi Motors, ranked fourth among Japanese automakers, will jump into the fray as well, following a recent deal with Daewoo Motor Sales according to which, the Korean company will sell the Japan-made vehicles in the country.

Expansion in South Korea has been underway by Japanese automakers from as early as 2000. The had a stake of 32% in the imported car market in the initial nine months of 2007, taking second place behind the Germans, who led the race with a combined share of 35%.

It wasn’t very long ago that South Korea’s bid to rival Japan as an auto industry translated into stiff tariffs on imported cars, making foreign-made cars a rare sight in Seoul streets. But now the capital of Asia’s fourth largest economy is teeming with ultra-modern models of Japanese brands, and Koreans are increasingly abandoning nationalism for the innovative beauties. With new model launches and all-out promotions, South Korea is witnessing a growth in imported car sales year-on-year.

Also, the Japanese carmakers would be favored by a strong local currency and a free trade deal between Seoul and Washington that would eliminate the 8% tariff on imported cars.

South Korea’s financial watchdogs declared the record profits of Japanese carmakers in South Korea a result of the weak yen. In a report by
The Hankyoreh, Yun Dae-sung, the Executive Member of the Korea Automobile Importers & Distributors Association, anticipated that the advent of the Japanese carmakers would pick up speed, as affordable and high-convenience models to cater to the Korean consumer tastes will be introduced.

A
RNCOS research analyst observed that once Japanese companies brought the lower priced models to South Korea, it would give a severe blow to the local auto market, which has been under domination of homegrown brands like Hyundai Motor and Kia Motor.

Related Market Research Reports:
China Automobile Sector to 2010
Czech Republic Automobile Sector
Brazil Automobile Industry till 2010