Shipping delays in Red Sea also a factor in last month’s decline

Sales of imported light passenger vehicles in South Korea fell by over 19% to 13,083 units in January 2024 from 16,222 units a year earlier, according to data released by the Korea Automobile Importers & Distributors Association (KAIDA). The data does not include some non-affiliated brands.

This compares with just a 2% sales decline by domestic manufacturers last month, as brands such as Hyundai and Kia continue to recapture market share from importers. Overall demand for new vehicles in South Korea remains sluggish, however, with consumer spending affected by the sharp interest rate hikes by the central bank over the last year - from 1.25% to 3.5%.

Import sales last month were also affected by shipping delays as a result of rising geo-political tensions in the Red Sea, which also affected some exports from South Korea. German-owned brands accounted for two-thirds of total import sales last month, down from over 75% last year, with some manufacturers reporting very sharp declines.

Segment leader BMW reported a 29% fall in deliveries to 4,330 units in January despite the recent arrival of the new 5-series sedan, while Mini sales almost doubled to 543 units. Volkswagen’s sales dropped by 73% to just 53 units; Audi sales plunged by 93% to 179 units; while Porsche’s sales were down by 7% at 677 units.

Mercedes-Benz’ sales increased by just over 1% to 2,931 units, with the company launching its new E-series sedan last month, while Volvo’s sales declined by 4% drop to 965 units - underpinned by the recent launch of the EX30 battery-powered compact SUV.

Toyota’s sales almost tripled to 786 units, helped by the recent introduction of the RAV4 plug-in hybrid (PHEV) and the Crown hybrid crossover vehicle, while Lexus sales were up by 73% at 998 units. Tesla sales are now reported by the association, with data showing just 1 sale last month.

Major import brands including Mercedes-Benz, BMW, Porsche and Volvo are investing heavily to strengthen their EV charging networks as they look to increase their share of the country’s plug-in market. Industry data show that imports accounted for almost 27% of South Korea’s battery electric vehicle (BEV) market last year, up from 3.5% in 2022.