Cheap gas fans demand for luxury SUVs

With low international oil prices fanning demand for sport utility vehicles, foreign automakers have been aggressively targeting the local market with new luxury models.

The latest is Audi, which said Thursday that it has launched the second generation of its large-size Q7, its first full change since 2005.

The Q7 is offered in two trims: the Q7 35 TDI Quattro and 45 TDI. The key sales model will be the 35 TDI Quattro, which offers 218 horsepower and 51 kilogram-meters (369 pound-feet) of torque with fuel efficiency at 11.9 kilometers (7.4 miles) per liter. Fuel efficiency has been improved 26 percent from its predecessor thanks to a weight reduction of 325 kilograms (717 pounds).

Following the trend of smart driving systems, the Q7 includes attractive features like Traffic Jam Assist, which automatically controls acceleration and braking when a vehicle is in a traffic jam and traveling under 65 kilometers per hour. The company said the feature is the company’s very first step toward a fully autonomous driving system. Another addition unique among foreign brands is the Q7’s voice-recognition navigation system, which doesn’t have any trouble in finding a destination when spoken to in Korean.

Audi isn’t the only automaker releasing new luxury SUVs, with Mercedes-Benz and BMW Korea rolling out their latest models earlier this year.

Benz struck first. The German automaker was the second-highest-selling import brand last year at 46,994 units, but only 2,892 of those were SUVs. Considering that top-seller BMW sold 47,877 units overall in Korea last year and 7,795 SUVs, Benz needs a winning larger model to reclaim the No. 1 spot in the nation.

The company said earlier this year that it aims to double its SUV sales in 2016 and rolled out two new models in January: the GLC and GLE. The GLC is the successor of the GLK, while the GLE is a face-lift of the old ML class. Benz is off to a good start, selling 619 GLCs in February, the second most among all imported models.

BMW Korea quickly countered with the latest X1 sports activity vehicle, a full change from the first generation launched in 2009. “The X1 will compete with the Benz GLC, but has better price options,” said a spokesman of BMW Korea. The new X1 starts at 56.3 million won ($46,300).

Japanese automaker Lexus has also entered the fray with the RX, the model’s first full change since its launch in 2009. Unlike other SUVs, the RX is a hybrid and offered with a gasoline engine. Lexus Korea said it aims to sell 900 RXs this year, similar to sales of the Benz ML Class (833). Lexus sold 7,956 units last year, a 23 percent rise year on year.

According to the Korea Automobile Manufacturers Association (KAMA), domestic auto sales will drop by 2.8 percent from last year to 1.75 million units, but sales of imported cars and SUVs are expected to rise by 7.7 percent and 0.4 percent, respectively. The KAMA said about 37 percent of cars sold on the domestic market this year will be SUVs.

“Sales of diesel SUVs are expected to increase this year as well just like last year,” said Lee Hang-ku, a researcher at the Korean Institute for Industrial Economics & Trade.

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