The Korea Automobile Importers and Distributors Association (KAIDA) said Tuesday that 20-plus global brands introduced 36 new models to Korea over the first half of 2011, up 9.1% year on year.
As other fresh models are due in the coming months, the yearly figure is expected to top the previous high of 80 reached five years ago, the Korea Herald said.
“The new vehicles from overseas carmakers numbered five each in January and February. The figure jumped to nine in March and seven in both May and June,” a KAIDA official said.
“During the summer vacation season, new vehicles tend not to roll out but things have been different in 2011. Imported brands released almost 10 models this month alone. For the full 2011, the overall figure is likely to surpass 80.”
During the January-June period, Peugeot and Chrysler Jeep led the pack with five new models apiece followed by BMW, Mercedes-Benz and Volkswagen with four each.
In comparison, Honda and Cadillac did not phase in any new lines over the first six months of 2011 and neither did Nissan. But the latter introduced the third-generation Cube in August.
“Up until now, the consensus has been that the Korean market has yet to reach economy of scale from the perspective of some global automakers,” an industry source said.
“But things have changed abruptly of late as a mounting number of domestic motorists snap up foreign vehicles, parting with their traditions of sticking to locally assembled ones.”
Asia’s fourth-largest economy has been notorious for their home bias. End users tended to purchase only domestic brands such as Hyundai Motor and Kia Motors.
But the trend has shown clear signs of fading away over the past few years as amply demonstrated by the strong sales of global brands.
More than 51,000 imported cars were sold during the six-month period to June 30 this year, up 23.2% from the corresponding period last year.
The annual figure is expected to surpass 100,000 this year for the first time.
By month, the number first reached 10,000 in March to account for 7.85% of demand.
German carmakers continued their strong performance during the first half including the big four of BMW, Mercedes-Benz, Volkswagen and Audi.
They are likely to keep dominating the market after the free-trade agreement between Korea and the European Union went into effect beginning last month.
Previously, Korea levied 8% tariffs on imported passenger cars from Europe but the duties will be gradually scrapped by 2016 under the bilateral contract.
In contrast, Japanese competitors Toyota, Honda and Nissan have struggled to find their feet.
Excluding its sub-brand Lexus, Toyota’s sales dipped 21.4% in the first half while those of Honda and Nissan also headed down by 37.2% and 55.8% each year on year.
Market watchers worry that the Japanese players’ might slip further due to the FTA between Korea and the EU. European automakers will have more room to cut prices, something their Japanese rivals lack.
Korea and Japan have been in talks to sign a free trade pact but the contract is projected to take some time.