For the first time since the International Monetary Fund (IMF) foreign exchange crisis, the sales volume of imported cars has decreased for two consecutive years.

According to the Korea Automobile Importers and Distributors Association (KAIDA) on the 15th, the number of new registrations for imported passenger cars last year was 263,288, a decrease of 2.9% compared to the previous year. Following a 4.4% decline from the previous year, sales have dropped for two consecutive years.

Tesla's mid-size electric sedan Model 3. /Courtesy of Tesla Korea website

If Tesla (29,750 units), which has been included in the imported car statistics since last year, is excluded from last year's sales volume, the decline compared to the year before last increases to 13.8%.

The sales volume of imported cars decreasing for two consecutive years is the first time in 26 years since the IMF foreign exchange crisis in 1997-1998. At that time, the number of new registrations for imported cars was 10,315 units in 1996, 8,136 units in 1997, and 2,075 units in 1998.

The imported car market has faced three downturns in 2009 (60,993 units; -1.1%), 2016 (225,279 units; -7.6%), and 2019 (244,780 units; -6.1%); however, it rebounded the following year.

The imported car market reacts less sensitively to economic conditions, so the continued decline is seen as evidence that domestic stagnation is as serious as during the IMF foreign exchange crisis. There are also concerns that high exchange rates diminish the price competitiveness of imported cars.

Imported car companies plan to overcome sluggish sales through the new car effect. Audi Korea, which saw its domestic sales drop below 10,000 units for the first time in seven years last year, has decided to introduce the most new models, 16 in total, to the Korean market since entering in 2004.