Hyundai, Kia losing ground importation of luxury home that prices fall

  Lee Young said Tack luxury vehicles from Hyundai Motor Co. are oversized, overpriced gas guzzlers. So he opted for a more modest solution: a BMW 528i.

Foreign brands have not seen their market share in South Korea increasing for premium vehicles 41 percent from 28 percent in the past two years, according to the Korean industry groups, such as lower prices make abandon their cheaper cars and local buyers decades of preference for domestic brands .

"I was looking for a quality car that was not too big on the lookout," Lee, president of the Cosmetic genius, a packaging machinery manufacturer in the vicinity of Seoul said.

The last seven cars of 65-year-old were all Korean, starting with a Hyundai Excel in the 1980s. This time he chose his ₩ 71,000,000 ($ 64,000) on a BMW ₩ 85,000,000 K9 Hyundai affiliate Kia Motors Corp.

"Unless changes Hyundai and Kia and offer me a greater variety and better quality, I have no reason to return," said Lee.

The change in South Korea has a growing market for BMW, Mercedes-Benz, Daimler AG and Volkswagen AG's Audi. Your profits will come at the expense of Seoul-based Hyundai and Kia, who rely on the sale of luxury vehicles in the domestic market for a large part of their income.

"It's definitely something that Hyundai and Kia are concerned, and they should be worried," said Lee Sang Hyun, an auto analyst at NH Investment & Securities Co. "This trend is likely to have a negative impact on Hyundai's profits."

Tariffs on EU imports fell by 3.2 percent compared to 8 percent of a trade agreement was introduced in 2011, and next year they will be eliminated for most cars. A case in the United States has halved tariffs on cars up to 4 percent and eliminate by the year 2016.

Dream Boy

BMW, Audi and Mercedes-Benz - the largest automobile manufacturer in the world of luxury - all saw their Korean sales increase of 25 percent in the first quarter, faster growth in China.

The upscale Hyundai sales fell by 4.7 percent in the period of the entire automobile market in the country decreased by 2.2 percent.

The three German company sold 18,114 vehicles, which cost more than 40 million won Korean during the quarter, against 31,444 for Hyundai.

"Of course, it is the dream of every child to have a German car, but it was not the most important," said June Bum Park, 28, who has exchanged his Kia Forte sedan for Audi A4 a few weeks ago. "Audi has a better design, engine, security offered -. Overall, a better quality"

sticky prices for the Hyundai Equus - the most luxurious business model - Reach ₩ 68000000 ($ 61,000) to 151 million won. BMW 5 series works ₩ 61,000,000 113,000,000 won, if the Equus is closer to the size of the BMW 7 Series, which starts at ₩ 124 million.

Test Track

Hyundai profit fell 15 percent last quarter, squeezed by Japanese competitors driven by the depreciation of the yen.

This year, Hyundai says its sales are likely to increase at the slowest pace since 2007.

Investors have taken note. Shares of Hyundai this year, all major carmakers underperformed.

His Seoul shares traded decreased by 11 percent, compared to a minimal profit for BMW and an increase of 23 percent for the Bloomberg World Auto Industry index.

BMW offers a number of new models and a track in the Korean city of Incheon, where guests can test their cars at high speeds, the first in Asia.

Mercedes-Benz says it to give A-Class sedans in the second half of the year to attract customers in their 20s to 30s.

Has to take revenge, Hyundai this month reduced the price of mid-size sedans gained 1.5 million.

The automaker developed diesel engines, which have become popular in the imported brands. And it is the transformation of some dealers and service centers in order to better compete with the Germans offered by high-end digs.

Soft page

Hyundai plans a separate luxury brand, how to create 's Lexus and Honda Motor Co. Toyota Motor Corp. s Acura. For now, the company has the idea to sell its high-end models of the Hyundai nameplate rejected.

"We will enhance our efforts to the value of the brand and increase sales of high-end cars continues," Chief Financial Officer Lee Won Hee said in April.

Pil Soo Kim, Professor of Automotive Engineering at Daelim College in South Korea and a government adviser, said Hyundai is promoting its extensive network of dealers and maintenance relatively cheaper cost Canadian buyers recover.

"They should focus on the soft side," Kim said.

However, recent changes in the Korean automotive market will not be easily reversed, especially the younger and older buyers considering imports rather than domestic brands. And with more than 45 percent of the market, Hyundai still has a lot to lose share.

"Calved are customers who were loyal to the brand for over 20 years," Kim said. "It shows that the imported brands are now seen as something accessible."