Korea’s imported car sales plunge in February 2024

[Courtesy of BMW Korea]

Imported car sales in South Korea plunged in February 2024, posing challenges to the country’s imported car industry.

The Korea Automobile Importers & Distributors Association said on Wednesday that the total number of newly registered imported cars was 16,237 units in February 2024, down 24.9 percent from 21,622 units a year ago. The sales decline for major brands was 88 percent for Audi, 35 percent for Mercedes-Benz, 32 percent for Lexus, 26 percent for Porsche, 11 percent for Volkswagen and 5 percent for BMW.

Korean imported car sales declined for a second consecutive month. The number of imported vehicles sold in January 2024 totaled 13,083 units, down 19.4 percent from the same period a year ago and was the lowest figure in 11 years.

Cumulative sales for January and February 2024 totaled 29,320 units, the first time in 10 years that the total sales for the first two months of the year fell below 30,000 units since 2014 (28,701 units). There were even suggestions that this figure was barely met by dealers accelerating deliveries scheduled for March 2024 to February.

Brands with relatively low sales performance are directly affected in the contracting imported car market, with the polarization between top and bottom-selling brands intensifying as new demand concentrates on well-known brands such as BMW.

Of the 26 brands affiliated with the Korea Automobile Importers & Distributors Association, the combined market share of the top 5 brands was 76 percent in the first two months of 2024, up 1.3 percentage points from 74.7 percent a year ago.

[Graphics by Song Ji-yoon and Yoon Yeon-hae]

Audi had the most significant decline. The brand managed to hold on to third place after a close competition with Volvo in 2023, but its sales in January and February 2024 fell to 447 units, ranking 12th overall. During the same period, Volvo (1,926 units) and Lexus (1,917 units) sold more than four times as many units as Audi.

Volkswagen faced its own challenges. The brand sold over 30,000 units annually in Korea until 2015, but sales dropped to 10,247 units in 2023 after the company’s Dieselgate scandal. The company struggled to remain a member of the “10,000 units club” in 2024 after selling 515 vehicles in the first two months of the year, down 27.8 percent from the same period a year ago.

Stellantis Korea, which imports and sells Jeep and Peugeot vehicles in the country, conducted voluntary retirement in 2023 and its president Jake Aumann stepped down in January 2024. Stellantis aims to use the appointment of a new president to revamp its lineup and seek opportunities for a rebound in the Korean market.

Even brands that set sales records in 2023 are aiming to maintain the status quo in 2024, with the high-interest rate and inflation environment is expected to continue and leading consumers to tighten their wallets.

“The number of customers visiting showrooms has declined since the second half of 2023,” an industry insider said.

“In a situation where demand for new cars is shrinking, buyers could be drawn to some imported brands with high recognition,” Kim Pil-soo, a professor of automotive engineering at Daelim University, said, adding that “lower-priced brands that have overlapping models with Korean cars will be the hardest hit.”