"Korea Is the Cheapest Globally"... The Allure of Imported Cars

Aggressive Domestic Market Strategy Aligned with National Electric Vehicle Subsidies
Volvo SUV C40 Recharge 22 Million KRW Cheaper than in Germany
BMW i4 Initial Stock Sold Out... Polestar 2 Additional Supply Under Negotiation

[Asia Economy Reporter Yoo Hyun-seok] Overseas imported car brands are actively targeting the domestic electric vehicle (EV) market by leveraging price competitiveness. Last year, the domestic EV registration rate was only 6%, indicating a market in its infancy, and these brands are making moves to expand their market share through aggressive strategies.

According to the automotive industry on the 8th, BMW Korea launched the pure electric Gran Coupe i4 last month with two powertrain options: the eDrive40 and M50. The prices are 66.5 million KRW for the i4 eDrive40 M Sport Package and 73.1 million KRW for the i4 eDrive40 M Sport Pro. The M Performance models, i4 M50 and i4 M50 Pro, are priced at 84.9 million KRW and 86.6 million KRW respectively. Considering that the German prices start at about 78 million KRW for the eDrive40 and 94 million KRW for the M50, these prices are more than 10 million KRW cheaper.

Volvo also priced its SUVs introduced this year, the C40 Recharge and XC40 Recharge, at 63.91 million KRW and 62.96 million KRW respectively. Among these, the C40 is about 8.9 million KRW cheaper than in the United States (72.85 million KRW) and 22 million KRW cheaper compared to Germany (86.4 million KRW). Additionally, the Polestar 2 Long Range single motor base price is set at 54.9 million KRW, and the dual motor at 57.9 million KRW. The single motor Polestar 2 is significantly cheaper than in the UK (69.04 million KRW), Germany (60.84 million KRW), and the US (56.15 million KRW).

As overseas imported car brands set aggressive prices, consumer response has surged dramatically. For the i4, the initial supply of about 3,700 units has already sold out. Volvo’s C40 Recharge and XC40 Recharge also sold out with 1,500 and 500 units respectively. Polestar surpassed its annual target of 4,000 units within a week of pre-orders. Some companies are negotiating with their headquarters to secure additional supply.

Seoul Mobility Show held in November last year

The reason these companies are aggressively marketing with price advantages is to align with the national EV subsidy. This year, the national EV subsidy offers up to 7 million KRW if the EV price is below 55 million KRW. For prices between 55 million and 85 million KRW, a 50% subsidy of 3.5 million KRW is available. No subsidy is provided for prices above 85 million KRW.

The fact that the EV market is just beginning to grow is also cited as a factor for aggressive pricing. According to the Ministry of Land, Infrastructure and Transport, the number of newly registered vehicles last year was 1.743 million units, of which about 100,000 were electric vehicles. Although the number surpassed 100,000 for the first time last year, it only accounts for 5.74% of the total. Since the share is still low, the market has very high growth potential.

There is also analysis that overseas imported cars are making moves to maintain their position. The cumulative share of imported cars last year was 11.8%, up 3.4 percentage points from 8.4% in 2017. However, with Hyundai Motor and Kia recently releasing electric vehicles that have received excellent evaluations overseas, imported brands are feeling a sense of crisis.

Professor Kim Pil-soo of Daelim University’s Department of Automotive Studies said, "Korea is one of the leading countries globally in electric vehicles, yet the scale of imported cars is quite large. Consumers’ expectations have also risen significantly, and with Hyundai and Kia introducing high-quality models like the Ioniq 5 and EV6, overseas imported cars are emphasizing price competitiveness to solidify their market position."

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