Imports roll over Korea

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Imports roll over Korea


*Lexus, Biggest market share in Jeju (25%), Best selling model: es, Reasons for popularity: Being an island with winds and high, humidity, customers want durable models/ Mercedes-Benz, Biggest market share in South Gyeongsang (27%), Best selling model: E-Class, Safe and classy image popular with corporate customers/ Volkswagen, Biggest market share in Daejeon (21%), Gyeonggi (17%), Gangwon (21%), North Chungcheong (23%), North Jeolla (21%), Best selling model: Golf, Popular in areas with industrial complexes. Officials in Sejong, City have long drives to Seoul and back and Volkswagen, models get good mileage/ BMW, Biggest market share in Seoul (17%), Busan (27%), Daegu (23%), Incheon (38%), Gwangju (19%), Ulsan (24)%, South Jeolla (24%), North Gyeongsang (19%), Best selling model: 520d, Sells best nationwide. Customers attracted to brand’s image. Showrooms hold cultural events customized to each region/ Source: Korea Automobile Importers and Distributors Association

The popularity of imported cars is spreading beyond its former stronghold in the posh neighborhoods of Gangnam, southern Seoul.

Previously, sales of high-end imported cars were mostly concentrated in neighborhoods south of the Han River, where a lot of the locals are considered nouveau riches.

Today, German, Japanese and American automakers are seeking customers not only in Gangbuk, the northern part of Seoul, but in cities outside the nation’s capital as sales in Gangnam plateau.

Dealers consider Gangbuk an area ripe for the picking. Sales in the upper neighborhoods of the Han River surged 45.3 percent in the first six months of the year compared to the same period last year. It was the highest growth recorded in Seoul.

As a result imported brands are opening up new dealerships.

Last month, German automaker Volkswagen Korea opened a five-story showroom in Mia-dong, northern Seoul, and started displaying 13 models including the Polo, Passat, Tiguan and the new seventh generation Golf. The showroom is aimed at potential customers living in nearby districts like Nowon, Jongno and Dongdaemun. Mia-dong is not considered an affluent neighborhood. Most of its residents are in the middle- and lower-income classes.

The German automaker also opened a dealership in Mok-dong, a business area in western Seoul, south of the Han.

Ford Korea opened a showroom in Mia-dong on Oct. 1 after launching two more in Gyeonggi, one in Guri and one in Uijeongbu. The Mia-dong showroom offers test-driving services for all Ford and Lincoln models and includes the nation’s first exclusive lounge for Lincoln drivers.

Imported cars are also selling in small- and medium-sized cities in southern parts of the country.


Toyota Motor Korea sold more than 40 units in the four months after opening a showroom in Andong, North Gyeongsang, in May.

At the beginning of this month, Audi opened new showrooms in nine locales nationwide following one in Dongdaemun District, eastern Seoul, and one in Yongsan District, central Seoul, this summer. Half of the new showrooms are in cities near Seoul, including Anyang, Gyeonggi, and Cheonan, South Chungcheong, and provincial capitals including Cheongju, North Chungcheong, and Chuncheon, Gangwon. It also moved into Pohang in North Gyeongsang, Jinju in South Gyeongsang, Gunsan in North Jeolla and Suncheon in South Jeolla. It was the first time for Gunsan and Suncheon to have imported car showrooms.

“If large cities have led the imported automobile market so far, smaller cities will do so from now on,” a source at Audi said. “Gunsan is the second largest city in North Jeolla, Suncheon is the second in South Jeolla and Pohang, Jinju: We thought they all have enough demand and purchasing power.”

In fact, newly registered imported cars in North Gyeongsang excluding Daegu soared 196 percent in three years, from 687 units in 2009 to 2,038 units last year. South Jeolla, except for Gwangju, gained 1,033 units during the same period while the number expanded by 1,000 in Gangwon. In South Chungcheong, excluding Daejeon, 2,300 new foreign cars were registered last year alone. As imported cars began rolling into regional markets, nearby businesses are also influenced. Showrooms for imported cars usually have higher ceilings than domestic outlets and big windows, elevating the image of businesses nearby. Also, the showrooms naturally attract high-income customers.

Seohyeon-dong in Seongnam, Gyeonggi, boosted its image as a rich village thanks to imported car showrooms. Bundang District became the second mecca of imported automobiles, following Dosan-daero, the big avenue that connects Sinsa-dong and Cheongdam-dong in southern Seoul. Showrooms of brands including Audi, Toyota, Jaguar Land Rover Korea and Ford are located in both.

Haeundae in southern Busan is the most expensive area in the second-largest city in Korea, with showrooms for top-tier auto brands such as Porsche Korea, Bentley and Maserati. Ferrari and Lamborghini plan to move into the area soon.

Three years ago, Chrysler was the only foreign showroom in Jeju. There are four more now, forming an import automobile avenue in Jeju City. A joint showroom for BMW Korea and Mini, and one by Jaguar Land Rover Korea, opened on Yeonsam-ro, northern Jeju, in May. Volkswagen Korea also plans to open one with a service center in the neighborhood. The big boulevard is close to Jeju International Airport, the Jeju city hall and provincial headquarters.

“As imported automobile showrooms enter the best area, the images of nearby neighborhoods have been upgraded,” an industry insider said. “New brands are eyeing to open showrooms in the same areas because it is beneficial for both customers and companies to form a business district with more than four brands.”

Import cars are growing at the expense of the nation’s largest and second-largest manufacturers, Hyundai Motor and Kia Motors. In September, the two automakers together held 68.9 percent of the domestic market share by units, retreating for the second straight month. Their market share was 69.1 percent in August, and that was the first time in five years it was under 70 percent.

In unit sales, Hyundai Motor sold 46,257 units in September, down 19.6 percent compared to the same month last year. It was the first time in 13 months that its monthly sales dropped year-on-year. Kia Motors sold 32,123 units, a 17.7 percent drop in the same month.

Meanwhile, imports are even penetrating Ulsan, the home turf of the nation’s largest automaker, Hyundai Motor, and where its main plants are located. Brands that have footholds in the greater Busan area, including Mercedez-Benz, BMW Korea and Audi, are keeping their eyes on the city.

Audi opened an Ulsan showroom last year, and Ford recently opened a two-story showroom in the northeast of the city in August. BMW Korea, which has its showroom in Ulsan’s South District, recorded No.1 in market share for past three consecutive years.

“Most Ulsan drivers own Hyundai cars, but our sales jumped in recent years,” an Audi employee said. “In fact, Ulsan holds better purchasing power than Incheon and Gyeonggi. The city has lots of potential customers.”

Imported car sales in Busan, Ulsan and South Gyeongsang grew almost sevenfold in the last ten years.

In a response to the foreign brands’ aggressive expansion, local brands are trying to upgrade their networks and shops in Gangnam, southern Seoul. Hyundai Motor announced in July that it will open a flagship showroom on Dosan-daero in southern Seoul after purchasing an old Infiniti dealer shop. Dosan-daero is one of the fiercest battlefields for automakers in the Korean market, where 20 out of 28 imported brands have showrooms. This neighborhood is worth watching due to the number of showrooms and their size and opulence.

For Hyundai Motor, opening a premium shop there is like jumping right into the enemy’s headquarters. The automaker hasn’t said if the flagship showroom will be ready by the end of this year. The remodeling, which usually takes half a year, has been prolonged.

BY chae yoon-kyung AND park jin-seok []

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