South Korea-based carmakers under foreign ownership are rapidly losing ground to foreign car brands on home turf as they lag behind high-tech safety and convenience features due to insufficient investment.
The top five car sellers for the first three months in the Korean market were Hyundai Motor with 185,413 units, Kia with 130,075 units, Mercedes-Benz with 19,248 units, BMW with 17,392 units and GM Korea with 17,353 units, according to the Korea Automobile Manufacturers Association and the Korea Automobile Importers & Distributors Association on Monday.
They were followed by Renault Samsung Motors under French parent Renault S.A. that sold 13,129 units and troubled SsangYong Motor under India’s Mahindra & Mahindra with shipments of 12,627 units. Mercedes-Benz and BMW have remained in the top five sellers list for three consecutive months this year, rapidly ascending in Korea.
Outlook for the three underdogs – GM Korea, Renault Samsung Motors and SsangYong Motor – remain murky. They have been grappling with long-term labor disputes and liquidity woes. They have no immediate plans for new releases while their parent companies are hesitant to place new vehicle production orders to the Korean plants.
Combined sales of GM Korea, Renault Samsung Motors and SsangYong Motor fell 23.8 percent to 43,109 units at home for the first quarter, the lowest since 1998 when the country was under international bailout following a liquidity crisis in the late 1990s.
Import car brands, however, are active in upgrading navigation software and other high-tech features to better appeal to consumers in Korea. Mercedes-Benz and BMW new models started employing T map navigation system with the largest subscription rate in Korea.
The pickup truck market, previously dominated by SsangYong Motor, has been invaded by foreign brands with new releases.
By Seo Dong-cheol, Park Yun-gu and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]