The market share of foreign brands in South Korea more than doubled in the past four years to a record 13 % in August, with automakers like Mercedes-Benz making up about 14 % of that and BMW 24 %.
According to data from the Korea Automobile Importers and Distributors Association, the market share for imported autos in Asia’s fourth-biggest economy was 10 % in 2012, compared to just 4.9 % in 2009.
“Institutional investors were competing to buy,” said Kim Se Yong, a credit analyst in Seoul at Shinyoung Securities Co. “Both Mercedes-Benz and BMW Financial Services Korea are luring investors with their comparatively stable asset quality, and that’s a result of their captive market shares.”
Combined deliveries of local brands, including Hyundai and Kia, went down 0.6 % to 1.01 million units for the January-September period, Korea Automobile Manufacturers Association data shows. Sales in September slipped 13 % from a year earlier. By contrast, sales of imported cars jumped 21 % to 116,085 units.
“More and more South Koreans are looking for imported cars that promise to be more luxurious,” said Shin Chung Kwan, an analyst at KB Investment & Securities Co. “Automakers like BMW and Mercedes-Benz not only offer better quality and have a favorable global brand image, but they also now offer the full line up of engines to lure Korean customers.”
Mercedes-Benz delivered 18,584 cars in South Korea the first nine months of the year, trailing BMW, which had sales of 25,088 units, the KAIDA data show. Volkswagen placed third with 18,511.