By William Maley
Staff Writer - CheersandGears.com
May 21, 2013
This maybe somewhat hard to believe, but German luxury models are cheaper than their Korean counterparts in South Korea. For example, a BMW 528i is around $64,000 in South Korea while Kia's flagship K9 is around $76,400. A difference of $12,400. Consumers in South Korea are taking notice of this and are going towards the Germans.
Why are the German vehicles much cheaper? Lowered tarrifs. Thanks to a trade pact introduced back in 2011, duties on European products dropped from 8 to 3.2 percent. This means automakers such as BMW, Audi, and Mercedes-Benz have seen an sales increase of 25 percent in the first quarter. Meanwhile Hyundai saw its share in luxury vehicles drop 4..7 percent.
“Customers who were loyal to the brand for over 20 years are breaking away. It shows that imported brands are now perceived as something accessible,” said Kim Pil Soo, professor of automotive engineering at Daelim College in South Korea and an adviser to the government.
Source: Bloomberg
William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.
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