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Flags of Korea and China are seen at a Hyundai Motor factory on the outskirts of Beijing in this 2019 file photo. Reuters-Yonhap |
By Park Jae-hyuk
Chinese carmakers are advancing into the Korean market, in contrast to Hyundai Motor and its sister company, Kia, who have seen sales plummet in the world's most populous market, data showed Thursday.
Given that Chinese electric vehicles (EVs) have attracted consumers here with affordable prices in addition to subsidies offered by the Korean government, calls are growing for the necessity of certain measures to be introduced to protect Korean-made EVs.
Data compiled by the Korea Automobile Manufacturers Association (KAMA) showed that sales of cars imported from China rose 125.3 percent year-on-year during the first half of this year, despite a 13.5 percent drop in overall sales of imported vehicles in the local market.
According to the association, sales of cars imported from Germany dropped 2.9 percent during the same period, while sales of cars imported from the U.S. fell 22.6 percent, due to the rapid decline in the sale of Tesla vehicles. Sales of cars manufactured in Korea decreased by 11 percent.
The soaring sales volume of cars imported from China was mainly attributed to the popularity of the country's electric buses and other commercial vehicles, which accounted for a 6.8 percent share of the Korean market during the first half of 2022, up from 1.1 percent a year ago.
Sales of Chinese electric trucks soared 8,218.2 percent year-on-year to 916 units from 11 units, while sales of Chinese electric buses rose 194.6 percent year-on-year to 436 units from 148 units.
A small-size electric truck made by Masada, for example, is originally priced at around 38 million won ($28,000), but it can be bought for around 15 million won, thanks to subsidies given by municipal governments. The reduced price is nearly 10 million won lower than the average price of similar models manufactured by Korean firms.
Prices of Chinese electric buses are almost half the price of Korean ones, and up to 70 million won in subsidies increase their price gap.
Sales of passenger cars imported from China also rose 83.9 percent year-on-year to 3,400 units, due to the increasing imports of BMW IX3 SUVs and Volvo S90 luxury sedans, both of which are manufactured in China, as well as Polestar EVs.
All BMW IX3 are produced in China by BMW Brilliance Automotive, a joint venture between BMW and China's Brilliance Automotive.
Polestar is an EV brand set up by China's Geely and its wholly-owned subsidiary, Sweden's Volvo Car.
Geely is also set to acquire a 34.02 percent stake in Renault Korea Motors for 264 billion won to become its second-largest shareholder. The two carmakers plan to develop a hybrid vehicle based on Volvo's compact modular architecture platform and begin production in Busan in 2024.
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A rendered image of BYD's electric bus K9 / Courtesy of BYD |
BYD, the top EV maker in China, indicated its intention to enter Korea's passenger car market by applying for the registration of trademarks of seven models, including the Seal, Dolphin and Atto models. BYD has already sold commercial vehicles in Korea through a local subsidiary.
"Countermeasures are needed against Chinese cars that have rapidly increased their share in the domestic commercial EV market with indiscriminative subsidies," KAMA Chairman Jeong Man-ki said.
Hyundai Motor and Kia, on the other hand, have faced difficulties selling vehicles in China, since Beijing implemented an unofficial boycott on Korean products in retaliation against Seoul's deployment of a U.S. Terminal High Altitude Area Defense (THAAD) system in 2016.
Sales of Hyundai Motor vehicles in China during the first half of this year fell 49.8 percent year-on-year to 94,000 units. Its market share dropped to 1 percent from 2 percent a year earlier. Sales of Kia vehicles there also declined 27.2 percent to 45,000 units. Amid sluggish sales, Hyundai Motor sold one of its factories in Beijing to Chinese EV maker Li Auto last year.