Foreign carmakers cut prices of models, parts in Korea

Foreign carmakers have launched aggressive promotion campaigns ahead of Korea`s effectuation of its free trade agreement with the U.S. on Thursday.

Detroit`s Big 3 automakers GM, Ford and Chrysler have cut the prices of their cars and parts, and Japanese and German counterparts have also reduced the prices of their cars produced in the U.S.

Ford Sales Service Korea announced Wednesday that it will cut the prices of all 2012 models by up to 5.25 million won (4,700 U.S. dollars) and those of parts an average 20 percent from Thursday, when the accord takes effect. The company has reflected a 4-percent tariff cut and a reduction of the individual consumption tax imposed on cars with an engine capacity larger than two liters (10 percent to 8 percent) in reducing the prices.

Accordingly, the price of the Lincoln MKS will fall 4.05 million won (3,600 dollars) from 58 million (55,000 dollars) to 53.95 million won (51,400 dollars), and that of the premium SUV Lincoln MKK will be cut 5.25 million won from 59 million (52,300 dollars) to 53.75 million won (47,700 dollars).

GM Korea cut the prices of all of its models between 1 million and 4 million won (890 to 3,500 dollars) last month. Chrysler Korea did so for its 2012 models such the Jeep Wrangler, Grand Cherokee and Compass by 2-3 percent.

With the effectuation of the accord cutting the individual consumption tax as well, GM Korea has also made the Chevrolet Malibu, Alpheon and Captiva cheaper. The price of the Malibu fell by 720,000 won (640 dollars).

wiseweb@donga.com