The German Association of Automotive Industry (VDA) has showcased the latest technology and opened the doors for medium-sized suppliers at a pavilion at the 2015 Seoul Motor Show.
With the import of foreign cars steadily rising in Korea, German cars, known for their world-class performance, design and safety, increased sales by 28 percent in 2014 with 143,300 vehicles.
Imported car sales overall increased 14 percent in 2014. One in 7 cars sold in Korea last year were imported, with German brands making up three-quarters.
“The Korean market has developed to a great success for German manufacturers. We are here to support our supplier companies by collaborating with Korean partners,” Klaus Braunig, managing director of VDA, told The Korea Herald last Thursday during the motor show, which was held at the Korea International Exhibition Center from April 3-12.
“Collaboration between medium-sized firms helps not only the automotive sector, but the entire industry by spurring innovative partnerships.”
The German Embassy’s Head of Mission Theodor Schuster (center) speaks beside German Association of Automotive Industry managing director Klaus Braunig (left) and head of press Eckehart Rotter at the Seoul Motor Show 2015 at KINTEX on Thursday. (Joel Lee/The Korea Herald)
A noticeable trend in Korea’s import car market is the dominance of premium vehicles, taking up over 70 percent of the market share. A total of 86 percent of all imported German cars to Korea belong in this category.
Newly registered cars with diesel engines, known for power and fuel efficiency, also increased from 25 percent in 2012 to 33 percent in 2014. Two-thirds of German cars sold in Korea in 2012 had diesel engines, with the figure rising to 80 percent in 2014.
German exports to Korea rose sharply after the EU-Korea Free Trade Agreement came into effect in 2011. The growing popularity of premium cars, the preference for diesel engines, successful marketing, low interest rate and the favorable euro-won exchange rate contributed to the sales, explained Braunig.
Theodor Schuster, head of mission at the German Embassy, said German manufacturers buy parts worth billions of dollars from Korean suppliers each year, which are not reflected in Korea’s deficit trade balance of 3.6 billion euros with the European Union.
“It is important to take note of positive effects that German manufacturers bring to Korea, including creating high-quality jobs for the ‘creative economy.’”
VDA head of press Eckehart Rotter said, “The old mentality of buying domestic brands as ‘patriotic consumers’ is waning. Greater opportunities offered by globalization are more and more appreciated by Korean consumers.”
German representatives said the “elaborate” certification required on imported motor-vehicle parts, introduced after the conclusion of FTA, should be redressed as it complicates packaging process.
The 66th International Motor Show will take place in Frankfurt am Main from Sept. 17-27 under the slogan “mobility connects.”
By Joel Lee (joel@heraldcorp.com)
