SK Networks will downsize its automobile parallel importing business, company officials have said.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
SK Networks, a trading company affiliated with SK Group, began parallel importing automobiles in late 2007, sparking hopes that a conglomerate-backed company importing foreign automobiles and selling them at prices lower than those offered by official importers would bring down imported vehicles’ prices in Korea, the Korea Herald said.
However, with the won falling against the dollar, the business began to lose profitability. Such developments have more than once led to speculation the company would shut down related operations.
The company told the paper that although it would be scaling back related operations, reports about the company making the decision to scrap the parallel importing business were false.
“We are not shutting down related operations all together but we will not be importing additional vehicles until the backlog has been cleared,” an SK Networks official told the Herald.
He said that it currently had about 100 vehicles that still needed to be sold. He added that as the won-dollar exchange rates have increased significantly since the company began parallel importing automobiles in 2007, the company plans to scale-down related operations and wait for more favourable conditions.
As part of its downsizing plans, the company will merge two showrooms for parallel imports in southern Seoul. The company’s parallel import dealership in Busan and the dealerships operated in collaboration with official importers and local branches of foreign carmakers will be maintained as they are.
“The parallel importing business only accounts for about 1% of the company’s total revenue, so there is room for us to wait and observe future developments.”
