The South Korean auto sector is boosting its sales and marketing efforts following the expiry of the temporary car sales tax discount at the end June.

Most auto brands began to offer discounts and other incentives at the beginning of July, to help avert a decline in the domestic vehicle market after the sales tax returned to 5% from the discounted rate of 3.5%.

Domestic automakers reported an 11% rise in local sales to 812,265 units in the first half of 2016, helped by the lower sales tax. The market is expected to weaken progressively in the second half of the year, after buyers brought forward their purchases into the first half of the year.

Dealers of leading import brands such as BMW, Mercedes-Benz and VW-Audi are offering discounts so that retail prices remain at last month's levels across the entire product range – at least for the month of July.

Other automakers, including Nissan and Fiat-Chrysler, have been more selective, by offering discounts only on certain model ranges. Domestic automakers are offering incentives on finance packages, helped by low central bank interest rates.