Imported Cars Sell Well... But Japanese Cars Can't Smile

Domestic Imported Car Sales Increase 19.1% from January to May
Japanese Brand Sales Plummet 62.1% in May

[Asia Economy Reporter Kim Ji-hee] The domestic imported car market is charging ahead relentlessly despite the major adversity of the novel coronavirus infection (COVID-19). Imported car sales in May exceeded 23,000 units, marking the highest monthly figure this year. However, the Japanese car industry is struggling to smile even as the overall market is on the rise.

According to the Korea Automobile Importers & Distributors Association (KAIDA), the number of newly registered imported passenger cars last month was 23,272 units, a 19.1% increase compared to the same period last year. Even compared to last year, when there was no impact from COVID-19, this ranks as the third highest monthly sales volume after December (30,072 units) and November (25,514 units).

The strong performance of European brands, led by the spectacular revival of Audi and Volkswagen, was evident. The market share of European cars in the domestic imported car market reached 80.6%. This means that 8 out of 10 imported cars sold last month in Korea were European cars from countries such as Germany, the United Kingdom, and Sweden. Mercedes-Benz and BMW continued their solid sales performance, supported by Audi and Volkswagen. Volkswagen’s Tiguan 2.0 TDI (3rd place, 655 units) and Audi’s A6 40 TDI (5th place, 634 units) made it into the top 10 monthly imported car sales, showing strong results.

On the other hand, Japanese brands, which fell into a slump following last year’s boycott movement, have yet to regain momentum. Sales of Japanese cars such as Toyota, Lexus, Honda, and Nissan last month plummeted by 62.1% compared to the same period last year, totaling only 1,672 units. During this period, their overall market share dropped from 22.6% last year to 7.2% this year, about one-third of the previous level. There are even concerns that annual sales of 20,000 units may be difficult to achieve this year if the current trend continues.

Among Japanese brands, Toyota (1,269 units → 485 units) and Lexus (1,431 units → 727 units), which were the most popular, both saw their sales halved. Lexus is maintaining its 10th place brand ranking, thanks to the ES300h (482 units), which is the only Japanese brand vehicle to rank within the top 10 in imported car sales.

At the beginning of this year, Japanese brands cautiously resumed marketing activities by launching new models. However, before these efforts could take effect, the spread of COVID-19 in Korea disrupted their plans. With demand shrinking in the global automobile market as well, Nissan ultimately decided to withdraw from the Korean market.

An official from the imported car industry explained, “For imported cars, which are priced higher than domestic cars, it is important to steadily build brand image. In a situation where brand value has been damaged by the boycott movement and the business environment has worsened due to the impact of COVID-19, the crisis has deepened.”

This content was produced with the assistance of AI translation services.