Even though the free trade agreement between South Korea and the United States takes effect next year, U.S. automakers are already cutting prices in the Asian country.
Once the free trade agreement is implemented, tariffs on U.S.-made cars will drop from 8 percent to 4 percent, thus pushing down consumer prices by about 2-3 percent. However, U.S. automakers are reducing prices in advance in order to lure customers from European brands, the Chosun Ilbo newspaper reports.
For example, Sunin Motors, the Ford dealership in South Korea, cut the prices of its best-selling sedans by up to 6 million won ($5,220) as a Christmas promotion. The Ford Taurus 3.5, which normally costs $45,588, is offered with a reduction of $3,480, half of which for expected tariff cuts and half for the holiday discount.
The Ford Fusion will be $5,220 cheaper from its usual price of $31,059, while the Escape and Explorer SUVs are offered with discounts between $1,740 and $2,610.
Chrysler Korea also cut prices on Jeep vehicles this month, by 1 percent to 3.1 percent. As a result, the four-door Wrangler Rubicon now costs $42,890, down from $44,283. Chrysler brand sedans are not included in the offer, as they are build in Canada.
General Motors Korea, which imports Cadillac vehicles, will reduce prices by 2 percent to 3 percent only after the free trade agreement comes into effect.