With the new Impala, GM Korea finally gets a hit

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With the new Impala, GM Korea finally gets a hit

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GM Korea has been struggling to expand its share of the domestic full-size sedan market, with its recent offerings receiving lukewarm reactions from local consumers.

With its latest release of the Impala, however, things are looking up for the automaker.

The model went on sale Aug. 31, and the company said it has received more than 5,000 orders so far, including the pre-orders it began receiving July 31.

At the model’s launch event, the company said it aims to sell 20,000 units per year, which seems likely considering the current rate of sales.

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One of the key models in the segment for GM Korea used to be the Alpheon, but the company decided to stop producing the car in the country after selling only 2,301 units in 2014, a 19.3 percent drop year-on-year.

In July, only 347 Alpheons were sold - just 0.05 percent of the sales made by its rival, Hyundai Motor’s Grandeur, at 7,044 units.

GM Korea announced in August that it would release the Impala in Korea. The model is the bestselling large-size sedan in North America, with sales of over 140,000 last year and cumulative sales of 16 million units since it debuted in 1958.

It looks like the company’s CEO Sergio Rocha made the right call, as the Impala has been successfully drawing Korean consumers.

On its first day, dealers recorded 900 orders for the Impala.

When the Alpheon rolled out in 2010, only about 900 orders were recorded in the first month - and sales only got worse, according to the company.

“Since the Impala arrived here, more than 70 percent of consumers vising the shop came to see it,” said Hwang Seong-soo, head of Chevrolet’s Jongno dealer shop in central Seoul.

“Consumers seeking the sedan will need to wait two to three months for the car to be delivered once the contract is signed.”

The company said about 60 percent of orders were for the 2.5 LTZ trim, while 20 percent were for both the 2.5 LT and 3.6 LTZ trims.

The Korean full-size sedan market is one of the toughest for automakers since local consumers are sensitive to trends, and the market is currently led by old standbys like Hyundai Motor’s Hyundai Grandeur HG and Kia Motors’ K7.

Last year, Hyundai strengthened its lineup by adding the front-wheel drive luxury sedan Aslan, and the introduction of foreign luxury cars by German automakers - including BMW’s 520d, Mercedes-Benz’s E-Class and Audi’s A6 - into the market have made competition even stiffer.

But it looks like the Impala has managed to provide exactly what Korean consumers are seeking in a full-size sedan.

The Impala provides a relatively wider interior than the Hyundai Grandeur, 5.11 meters (16.77 feet) long versus 4.92 meters, and also offers 535 liters (19 cubic feet) of trunk space, which is enough to fit four golf bags.

The model’s basic trim, the 2.5 LT, includes popular features like an eight-inch navigation system, rear side parking assistance and Apple CarPlay, which allows iPhone users to operate their phones on the navigation screen, as basic options. A panorama sunroof can be installed for 860,000 won ($720).

In rival models like the Grandeur and K7, the inclusion of just a navigation system costs at least an extra 1 million won.

GM Korea has also priced the model competitively. The Impala’s lowest trim LT was offered at 34.09 million won, but as the government lowers the consumption tax on luxury products, the model’s sticker price is 33.63 million won.

The Impala’s highest trim, the 3.6 LTZ, is offered at 41.36 million won.

The prices in Korea are about 3 million to 4 million won lower than in the United States. CEO Sergio Rocha said at the launch event in August that such a pricing strategy would attract consumers who are also considering the Grandeur or Aslan.

The Grandeur HG 2.4 is offered at 30.24 million won, but considering that it doesn’t include options like navigation, the price gap is fairly insignificant.

The Impala is cheaper than Hyundai’s Aslan G300, which sells for 38.24 million won, and is also less pricey than the Ford Taurus (38.95 million won) and Toyota Avalon (48.1 million won).

“Though the Impala is sold through GM Korea, local consumers consider the car an import since it is directly imported from the United States, meaning that it is recognized as an affordable luxury import,” said Ko Tae-bong, an analyst at HI Investment and Securities.

But there is one important concern for GM Korea. The company said it brings about 1,000 to 1,500 cars from Detroit to Korea per month, which means it will take at least three months to deliver on its current 5,000 orders. Korean customers who don’t like to wait may consider other options. This isn’t good news for GM Korea, particularly as Kia Motors will introduce its second-generation K7 later this year.

“We are consistently discussing with GM in the U.S. so the supply can meet the demand,” a spokesman for GM Korea said.


BY KWON SANG-SOO [kwon.sangsoo@joongang.co.kr]
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