South Korean car exports to European countries have surged 40% year-on-year as a possible result of the Korea-EU Free Trade Agreement that took effect in early July.
The country’s five carmakers exported 347,207 units to EU countries in the first 10 months of 2011, compared to 247,909 units in the same period of 2010.
Overall export growth was 13.2% ahead, according to the Korea Automobile Manufacturers Association.
The EU saw top growth among major export targets, followed by Asia at 33%, Eastern Europe, 16.7%, and Central and South America, 15.3%. Exports to North America increased 11.4% and the Middle East grew 5%.
With the implementation of the Korea-EU FTA on 1 July, the tariff rate on Korean-made cars with an engine capacity of less than 1.5 litres was lowered from 10% to 8.3% for cars and to 7% for cars with engine capacity of over 1.5 litres. Dealers say the trade pact has provided Korean carmakers with greater price competitiveness in Europe.
Duties on smaller cars will be removed within five years. South Korea currently imposes an 8% import duty on European cars, of which 32,000 were sold there last year while Korean manufacturers exported about 408,000 vehicles to the EU.