Expensive imported vehicles owned by Korean firms on the rise

[Photo by Yonhap]

The number of business-owned imported vehicles priced at over 200 million ($150,000), is steadily increasing in South Korea, while the number of those priced below 50 million won and registered for commercial purposes is declining. The trend is raising concerns about the distortion of the corporate-owned vehicle system designed to provide tax benefits by treating vehicles owned and driven by a corporation as expenses.

According to data obtained by Rep. Chung Woo-taik from the Ministry of Land, Infrastructure, and Transport and the Seoul Metropolitan Government, there were 40,483 corporate-owned imported vehicles priced above 200 million won, while there were 146,949 corporate-owned imported vehicles priced below 50 million won as of the end of August.

High-value corporate-owned imported vehicles have been on a consistent rise, while vehicles priced below 50 million saw a decrease for the first time this year. The number of imported cars with corporate names exceeding 200 million won increased to 33,263 last year from 7,233 in 2017, 9,698 in 2018, 12,834 in 2019, 16,568 in 2020, and 23,174 in 2021.

The number of very expensive imported cars with corporate names exceeding 300 million won also hit 7,994 at the end of last month. This is an increase of 1,704 units in the first eight months of the year, which is almost as much as the entire year of 2022.

The number of imported cars under the corporate nameplate worth less than 50 million won fell for the first time this year from its steady upward trend since 2017. After increasing from 73,830 units in 2017 to 147,348 units last year, the number stood at 146,949 units at the end of August 2023.

In the last five years, the districts with the highest numbers of new registrations for corporate-owned vehicles priced above 300 million were Seoul’s Seocho District in 2021 (45 vehicles), Gangdong District in 2021 (54 vehicles), Gangdong District in 2020 (41 vehicles), Yeongdeungpo District in 2019 (37 vehicles), and Yeongdeungpo District in 2018 (20 vehicles).

Chung expressed concern about the trend, saying that the issue of multi-million-won vehicles being privately used by corporate owners or their families is a long-standing problem that distorts the corporate vehicle ownership system.

He emphasized the need for swift action by the government and local authorities, suggesting that the implementation of green license plates, along with other measures, is essential to address this issue.