As sales of imported cars have generally stagnated, Japanese automakers such as Lexus and Toyota showed significant growth last year. This is attributed to the improvement of South Korea-Japan relations and the growing interest in hybrid vehicles, which Japanese automakers excel in, as an alternative to electric cars.
According to the Korea Automobile Importers and Distributors Association (KAIDA), sales of vehicles from Japanese brands like Lexus, Toyota, and Honda in the domestic market last year amounted to 26,190 units, an increase of about 11.9% compared to 23,411 units in 2023. This reflects a solid performance compared to the overall decline of about 3% in annual imported car sales last year.
Specifically, Toyota's luxury brand Lexus sold 13,696 units, up about 3% from the previous year, surpassing the annual sales mark of 10,000 units for two consecutive years. Toyota's domestic sales reached 9,714 units, reflecting a 14.3% increase compared to the previous year.
The demand for hybrid cars has risen in the wake of the electric vehicle chasm (temporary demand slowdown), highlighting Japanese vehicles. Among Japanese cars, the Lexus ES300h, a mid-sized sedan, is the only model included in the top 10 overall imported car sales, with 6,558 units sold (ranked 6th) and also a hybrid vehicle.
Japanese automakers have proactively invested in hybrid technology and expanded production. In the domestic market, Lexus has a hybrid vehicle sales share of 99%, while Toyota reaches 95%. It is reported that more than half of Honda's sales are hybrid models. For Honda, sales increased by 81.0% to 2,507 units, driven by the sales growth of hybrid models launched in the second half of 2023, including the Accord and CR-V.
The improvement in South Korea-Japan relations and the weakening yen, which resulted in smaller price increases for new cars, have also impacted sales. Japanese vehicles experienced sluggish sales through 2022, coinciding with the consumer boycott movement known as 'No Japan', which intensified in the second half of 2019, and the COVID-19 pandemic.
Last year, sales of major imported car brands excluding Japanese vehicles showed a decrease. German brands such as Mercedes-Benz, BMW, Audi, and Volkswagen sold 157,731 units domestically last year, a decline of about 13.4% compared to 182,207 units in 2023.