Import Cars Target the 20 Million Won Range

Low-priced foreign cars are rushing into the Korean market, at the mid-20 million won range, a level comparable to local mid-sized cars.

Until now, the cheapest import cars still cost at least 29 million won, four million more than Korean medium-sized cars typically priced at or around 25 million won.

However, a series of compact and subcompact models won are being imported at around 26 million won, posing a threat to local-made mid-sized vehicles at the same price range.

Honda Civic, a Force to be Reckoned with-

Honda Korea launches Civic (2000cc), the Japanese automaker Honda’s global best-selling compact car, in the Korean market on Wednesday. Sold for 18-20 million won in the U.S. and Japan, the Korean retail price of the model is expected to reach between 26-28 million won depending on extra options, as customs duties and excise taxes are levied.

The Civic model which will meet Korean consumers has a similar exterior as the Acura CSX sold in Canada, and shares the same basic platform as the Civic in Japan and the U.S.

Selected as car of the year by more than 10 auto magazines and consumer research agencies, including the U.S. Motor Trend and Consumer Reports, the Honda Civic is renowned for its reliability and economic efficiency and is projected to become a powerful player in the Korean auto market.

Foreign Cars Ranging 20 Million Won-

Import cars between the 20-30 million won price range include Peugeot 206 CC, Ford Mondeo, DaimlerChrysler PT Cruiser, and Volkswagen Golf 2.0 FSI. The Ford Mondeo is the cheapest at around 26.6 million won, and the rest are over 29 million won.

Cars in the 20 million won range accounted for 5.15 percent of the total import car sales in the first half of this year, up by eight-fold from the 0.65 percent in 2003. Forecasts are being made that the figure will grow to 8-10 percent next year, with the addition of the Honda Civic.

Toyota Motor Korea, vendor of the high-end brand Lexus, plans to bring in the general brand Toyota models when the lower-price import car market gets into full swing.

Japanese cars are becoming much more affordable lately, with the Korean won rising in value against the Japanese yen.

Local Cars Not Much Cheaper-

The high-end Sonata F24s starts out at 28.76 million won, only one million won lower than PT Cruiser, which has the same engine displacement. Adding options such as curtain airbags or navigation systems drives up the price to over 30 million won.

The price for 2000cc displacement Sonata N20 Premier Super model also begins at 24.6 million won, and a few options push it up to the 27 million won range, not much different from the price of lower-end foreign models.

“In controlling up to 75 percent of the domestic market, Hyundai and Kia Motors have in some part raised the auto prices,” said an executive at GM Daewoo. “Thanks to Hyundai, the other local companies had a relatively easy time in lifting prices.”

“True, we are paying close attention to the launching of the Honda Civic,” remarked a senior manager at Hyundai Motors in response. “But local cars are still much more competitive, as the local mid-sized cars costing around 20 million won now offer much higher quality than before as well as many convenient features.”

mobidic@donga.com