Honda’s sales of cars and two-wheeled vehicles mixed in South Korea

Honda Motor Co.’s scooter PCX [Photo provided by Honda Motor]

Since the boycott of Japanese products in South Korea in 2019, Japanese carmaker Honda Motor Co.’s sales in the Korean market have declined significantly, while demand for its two-wheeled vehicles have soared.

Honda Korea maintained its leading position in the Korean two-wheeled vehicle market last year with 32.8 percent, doubling from 16.5 percent in 2017, according to the Korea Motorcycle Industry Association on Tuesday.

The size of the new two-wheeled vehicle market in Korea increased by 28,659 units to 133,998 last year from 105,339 units in 2017. During the same period, Honda Korea’s two-wheeler sales increased by 26,589 units to 43,945 units from 17,356 units, accounting for 93 percent of the total sales in the Korean two-wheeled vehicle market over the past five years.

Honda Korea’s enhanced brand position in the Korean two-wheeled vehicle market happened to coincide with the rapid growth of delivery service market in the country. The company’s flagship scooter PCX is very popular among Korean delivery riders as a cost-effective model.

Honda Korea’s presence in the local car market, however, is quite a different story. Honda’s car sales fell by 69.5 percent to 3,140 units last year from 10,299 units in 2017, according to the Korea Automobile Importers & Distributors Association. This is attributable mostly to Korea’s boycott of Japanese products. In addition, parts shortages and supply chain disruptions caused by the Covid-19 pushed the Korean market to the back burner in the Japanese car maker‘s global operations.

Motorcycles have less brand exposure in appearance and their value is emphasized as a means of transportation. For cars, on the other hand, brands are important that the brand logo is attached on the front of cars. Honda was hit hard as its brand power shrank in the Korean imported car market.

“Korean consumers tend to perceive cars as part of their wealth and are highly self-conscious,” said Kim Pil-soo, a professor of automotive engineering at Daelim University. “This is why Honda’s sales performance of two-wheeled vehicles and automobiles are quite different.”

Industry insiders are paying attention to whether Honda can increase its car sales again in the Korean market as Korea and Japan are moving to improve relations. Honda, meanwhile, plans to release a new hybrid model of its subcompact sport utility vehicle CR-V soon to try to turn things around.