BMW, Audi price drops only the tip of the iceberg

Audi Korea launched sales of A4 2.0 TFSI sedans in early March for 44 million won, the same as its preceding model, the A4 1.8 T. Provided by the company

Even before the free trade agreement between Korea and the United States goes into effect, premium import vehicle brands are racing to lower their price tags, narrowing the price gap with Korean cars.
BMW Korea, launching sales of four models in the 5 series segment last week, said its new 528i sedan will cost 67.5 million won ($72,714), 19 million won cheaper than its predecessor, the 525i.
Although the newer model has a bigger engine size and 10 percent improved output and torque compared to the older version, it costs more than 25 percent less.
A spokeswoman from the Korean operation of the German carmaker said, “The price cut was a strategic choice with a lowered margin as the company aims to raise sales volume this year.”
Another luxury carmaker from Germany, Audi Korea, said in March that its A4 2.0 TFSI will have the same price tag as its previous model, the A4 1.8 T ― 44.4 million won. Along with upgraded engine size, torque and output, the follow-up model is equipped with additional convenience devices including a navigation system, a digital compass and digital multimedia broadcasting television. Audi Korea claims that no price change for the latest model is equivalent to an over 5 million won discount.
Accordingly, the price difference between large-sized Korean cars and their import rivals has been curtailed, from up to 20 million won in the immediate past to 5 million won or so. For example, the 3.8-liter Equus Premier from Hyundai Motor Co. is only about 1 million won less than the 3-liter new 528i from BMW.
An executive from the Korea Automobile Importers & Distributors Association projected cheaper premium sedans from foreign vehicle brands costing around 50 to 70 million won will increasingly snatch clients away from domestic carmakers rolling out large vehicles.
When Korea and the United States signed a free trade deal in April, local drivers as well as related industry insiders forecast that not only American carmakers but also those with other nationalities will drag down their vehicle prices to appeal to a wider demographic.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]