GM Korea cuts sticker prices on five models

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GM Korea cuts sticker prices on five models

GM Korea, the local unit of General Motors, said it lowered prices of five models to boost sales.

The five models are the Chevrolet Spark mini car, the Cruze, the Malibu, the Alpheon sedans and the Captiva crossover, with discounts of up to 500,000 won ($473), said the company.

GM Korea said the price cut started from Friday but it will refund the money to people who already bought any one of the five models after Jan. 1.

“We lowered the prices as part of our efforts to support customers amid a slump in the local economy and the end of a government-led tax-cut plan,” said GM Korea in a statement.

GM Korea, the country’s third-largest carmaker, posted a 3.6 percent rise in its domestic sales last year, with a record high 145,702 units sold.

Meanwhile, Renault Samsung Motors, the Korean unit of French automaker Renault SA, said it has expanded its low-interest installment plan to all car models including its flagship SM5 sedan.

GM Korea’s price reduction and Renault Samsung’s move come after Hyundai Motor and Kia Motors recently cut prices of their large sedans including the Genesis and the K9 in order to counter slumping domestic sales and tide over the rising popularity of luxury imported cars in the country.

Automakers in Korea saw their domestic sales shrink 4.2 percent from a year earlier to 1.4 million vehicles in 2012 due to the economic slump.

The two leading automakers Hyundai Motor and Kia Motors domestic sales were down 2 percent compared to a year ago.

In contrast, sales of imported cars in Korea jumped 24.6 percent on-year to a record high of 130,858 units last year. This was the sharpest growth imported cars have seen since Korea opened its auto market to foreign brands in 1987 largely thanks to the price cuts from the bilateral trade agreement with the U.S. and Europe.

Industry insiders expect the local automobile market to continue to suffer sluggish demand this year due to the persistent economic slowdown, anemic consumer spending and a lack of new models.

The recent termination of a cut in consumption taxes on vehicle purchases is expected to further sap car demand, they added.

The Seoul government temporarily offered a 3 to 6 percent tax cut to car buyers from September to December in a bid to boost domestic consumption. Yonhap

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