It feels like just yesterday there was a tax audit for imported cars... Over 3 million units sold in 35 years

Domestic Imported Car Registrations, 2.95 Million Last Year → 3.17 Million by November
Share of Total Vehicles Rises to 12.4%
'House Price' Symbol of Wealth, Exclusive to a Small Wealthy Elite
Minimal Growth Since Official Import in 1987
Sharp Increase Centered on European Cars Since 2000s

The second-generation BMW 7 Series, produced until 1994. At that time, the domestic automobile market was expanding, and trade pressures from the United States were intensifying. As income levels rose domestically and import car regulations were lifted, various brands and imported car models increased.

[Asia Economy Reporter Choi Dae-yeol] The number of imported cars registered in South Korea has surpassed 3 million this year. According to data compiled by the Korea Automobile Manufacturers Association from the Ministry of Land, Infrastructure and Transport registration statistics, the number of imported cars was about 2.95 million at the end of last year, but as of last month, it increased by approximately 220,000 to 3.17 million in just over a year. Including domestic cars, imported cars account for about 12.4% of all vehicles. This means that one out of every eight cars on the road is an imported car.

There is no exact record of the first imported car in Korea, but it is generally considered to be the royal carriage (Eocha) used by Emperor Gojong and Emperor Sunjong during the late Korean Empire period. The Ford that Emperor Gojong rode was imported from the United States in 1911, and during Emperor Sunjong’s era, he is said to have used American Cadillac and British Daimler limousines. There are no clear traces of the Ford, but Hyundai Motor Company restored the Cadillac and Daimler cars and displayed them at the National Museum. It is said that only a few remain worldwide.

Imported cars officially began entering Korea in 1987, but even before that, they gradually spread among high-ranking officials in politics and business as well as celebrities. Since the taxes on imported cars were more than two and a half times the price of the car itself and the price was equivalent to one or two apartments, owning an imported car itself signified social status and financial power.

Emperor Sunjong's royal carriage (left) and Empress Sunjeonghyo's royal carriage. Restored by Hyundai Motor Company as a registered cultural heritage.

In the 1970s, cars used by minister-level high-ranking officials were dominated by foreign brands such as Chrysler, Lincoln, and Pontiac, and there was even an order from the Prime Minister to switch to domestic cars. The legendary singer Cho Yong-pil reportedly switched from the Granada (a domestic luxury car developed by European Ford and produced under license by Hyundai) in the 1980s to the Mercedes-Benz 280SE (now the S-Class) and has continued to use the same brand since then.

Imported cars officially entered the domestic market starting with Mercedes-Benz in 1987, but the volume was not large. This was due to the high car prices, tax investigations on buyers by authorities, eight different types of taxes, tariffs four times higher than those in the U.S. (10%), and regulations on safety, environment, and advertising. In the early 1990s, when the U.S. government pressured major trading partners with the so-called “Super 301” clause to retaliate against unfair trade, these factors were pointed out as representative trade barriers for South Korea.

South Korea initially opened the imported car market by limiting it to large cars with engine displacement of 2000cc and above or small cars under 1000cc, then expanded to all vehicle types the following year. The first imported brands to enter the domestic market were Mercedes-Benz (Hansung), Audi and Volkswagen (Hyosung), Volvo (Hanjin), and BMW (Kolon).

Various imported car brands available for sale in Korea

Domestic imported car sales, which were only 10 units in the first year, exceeded 10,000 units annually for the first time in 1996 (10,315 units), but fell again due to the foreign exchange crisis the following year. Sales surpassed 10,000 units again in 2002 (16,119 units). This was also when the market share of imported cars in the domestic passenger car market exceeded 1%. Around this time, Japanese cars, which were relatively affordable and durable, gained popularity, with Toyota’s luxury brand Lexus entering the domestic market in 2001.

Since then, imported cars, mainly high-end German brands, have been widely sold, and the overall imported car market has shown steady growth. Annual sales of imported passenger cars exceeded 100,000 units in 2011 and surpassed 200,000 units in 2015. Even in 2020 and last year, when new car sales slowed due to COVID-19, new records were set consecutively. Last year, the market share of imported cars in the domestic new passenger car sales market was 18.7%, the highest ever. As parts supply shortages have somewhat eased in the second half of the year, production is increasing, making it highly likely that the record for most sales will be broken again by the end of the year.

According to the total registration statistics from the Korea Imported Car Association, the most registered foreign car model in Korea is BMW’s mid-size sedan 520D, which has been a bestseller multiple times. As of the first half of this year, 66,342 units are registered. Mercedes-Benz’s competing model E300 follows with 65,898 units, and Lexus’s hybrid ES300h ranks third with 56,912 units. The figures for the 520D and E300 exclude all-wheel-drive models; including those, the E300 has slightly more units. Koreans tend to prefer relatively large cars, and the BMW 5 Series and Mercedes-Benz E-Class rank first and second worldwide in sales by country.

A Mercedes-Benz showroom in Seoul

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