[Graphics by Song Ji-yoon]
Sales of ultra-expensive imported cars priced in the hundreds of millions of won continued their growth in South Korea in 2023, a year when high interest rates and the global economic downturn dampened consumers’ appetite for imported cars.
According to the Korea Automobile Importers & Distributors Association on Monday, the cumulative number of newly registered vehicles (sales) of imported cars with an acquisition value of more than 300 million ($221,620) in the country totaled 3,138 units in 2023. This is a 10.2-fold increase in five years compared to the sales of 307 units in 2018.
The total sales value of imported cars priced over 300 million won also hit 1.9 trillion won in 2023, topping 1 trillion won for the first time. This figure is calculated based on the minimum price of each model excluding discounts or additional specifications.
The 300 million won and above segment of the imported car market is unique, with luxury car brands strategically limiting supply to increase scarcity even if there is pent-up demand. Buyers consequently compete for waiting lists for allocated quantities in each market and are required to pay approximately 10 percent of the vehicle price as a down payment when ordering a new car, which is non-refundable if they give up taking delivery of the vehicle.
Korea stands out as a region with significant growth in the global luxury car market, with the country accounting for 4.6 percent of Rolls-Royce’s global sales in 2023, up from 2.9 percent in 2018. During the same period, its share in Bentley’s global sales rose from 2 percent to 6 percent, Porsche from 1.7 percent to 3.5 percent, and Lamborghini from 0.2 percent to 4.3 percent. The proportion of sales from Maybach in Korea also expanded from 5.2 percent in 2019 to 10.1 percent in 2023.
Rolls-Royce sales in Korea totaled 276 units in 2023 to surpass Japan for the first time. Rolls-Royce sales in Japan increased by a mere 6 units to 236 units during the same period from 230 units in 2018, and the Japanese market‘s share of Rolls-Royce global sales also fell to 3.9 percent from 5.5 percent during the same period. Until 2018, the number of Rolls-Royce vehicles sold in Korea (123 units) was half that of Japan (230 units).
Mercedes-Benz is a prime example of a company that considers Korea a ‘exemplary market.’ Since announcing its ’Economics of Desire‘ strategy in May 2022, the luxury car maker has been focusing on increasing the sales proportion of high-end models.
It remains to be seen whether luxury car sales in Korea will continue to grow in 2024, with the number of newly registered Rolls-Royce vehicles totaling 20 units in the first two months of 2024, down 36 percent from the same period a year ago. During the same period, Bentley saw a sharp decrease of 82 percent in newly registered vehicles in the country, while Maybach decreased by 45 percent.
By Moon Gwang-min and Yoon Yeon-hae
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
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