Some imported car brands are launching strategic models in Korea with the lowest prices among key markets. They are pushing aggressive marketing to raise their share in the domestic market, where luxury car sales are still growing.
According to the imported car industry on the 1st, European luxury brands such as Volvo, BMW and Mercedes-Benz have recently launched new cars in Korea with prices set at the lowest level among major markets.
Volvo's EX90, launched in Korea on the 22nd, is a prime example. The domestic starting price is 72.94 million won, about 51 million won cheaper than in Sweden, the brand's home country. Volvo said it is also more than 10 million won cheaper than in China and Japan.
It is the same for other brands. BMW, which launched the iX3, an electric sport utility vehicle (SUV), set the domestic launch price starting at 79.9 million won. That is cheaper than the German price (€70,900, about 119.64 million won) and even the Hungarian price, where the plant is located (24,520,000 forints, about 113.77 million won).
A BMW official said, "We lowered the import cost as much as possible through fierce price negotiations with headquarters," adding, "Given the size of Korea's share in the global market, headquarters approved sales at a competitive price."
Mercedes-Benz, which began preorders for the first electric GLC, also set the launch price starting at 90 million won. Compared with the German price for the same model, the GLC 300 AMG 4MATIC (€65,851, about 111.02 million won), it is about 20 million won cheaper.
Audi, which launched the Q3, also set the domestic launch price starting at a significantly cheaper 60.8 million won, compared with the German price (€46,100, about 77.72 million won).
The imported car industry sees price competitiveness as essential to maintain growth in Korea's fiercely competitive market. An official at an imported car company said, "Lowering prices reduces headquarters' revenue, but as the domestic luxury car market continues to grow and its importance rises, price competition is becoming even more intense."
Of course, there are cases where differences in models and specifications sold in other countries are reflected in the price. Another official at an imported car company explained, "The reduced prices also partly reflect the exclusion of options that have low demand among domestic consumers or are not legally permitted."
According to the Korea Automobile Importers & Distributors Association (KAIDA), sales of imported cars priced at 70 million won or more rose 22.4% from 136,780 units in 2022 to 167,359 units last year. In the first half of this year, 81,973 units were sold, up 1.5% from a year earlier.
Lee Ho-geun, a professor of automotive studies at Daedeok University, said, "Korea is smaller than Europe or the United States, but it is a market with high demand for premium cars," adding, "Global automakers have an incentive to raise their market share even through price competition."