Korean Media: Japanese Cars Hit a Wall in South Korea, Chinese Automakers Fill the Void!
On May 28, Korean media outlet The Korea Economic Daily published an article stating that as Honda has decided to cease its automotive sales operations in South Korea by the end of this year, the landscape of the country's imported car market is undergoing transformation. Following Nissan’s exit, Honda’s withdrawal has further shrunk the market share of Japanese brands, while Chinese automakers such as BYD and Zeekr are stepping in by emphasizing electric vehicles and cost-effective products to fill the gap.
Recently, Honda Korea announced it will discontinue automobile sales and focus exclusively on motorcycle business. The company explained that after assessing business sustainability and growth strategies, it made the decision to exit the South Korean automotive market. It pointed out that for several years, the industry has been under persistent pressure due to soaring exchange rates and shifting market conditions. This marks the regrettable departure of Honda—a brand that once pioneered breakthroughs in South Korea’s import car market by surpassing annual sales of 10,000 units.
Honda is not the only Japanese automaker exiting the South Korean market. Nissan and Infiniti had already withdrawn from the South Korean market back in 2020. At the time, a combination of anti-Japanese sentiment, weak sales performance, and global restructuring contributed to that decision. Although Japanese brands have shown some signs of recovery since then, they have failed to regain their former prominence in South Korea’s imported vehicle market.
The fundamental reason behind the changing market structure lies in the dominance of certain brands. In the luxury segment of South Korea’s imported car market, Mercedes-Benz, BMW, Audi, and Porsche occupy the majority of the share, while Tesla holds a commanding position in the electric vehicle sector. Despite advantages in durability, fuel efficiency, and pricing, Japanese cars have seen their market share significantly decline—being pushed out of the luxury segment by German rivals and overtaken in the EV space by Tesla.
Another key factor is their delayed transition toward electrification. Toyota and Lexus have maintained stable demand thanks to their hybrid technology leadership, but Honda and Nissan, sticking with internal combustion engines, failed to launch enough electric models to attract consumer attention.
Meanwhile, Chinese automakers are accelerating their expansion into the South Korean market. Since entering the market in March last year, BYD Korea has sold a cumulative total of 10,075 vehicles as of last month—6,107 units were sold in 2023 and 3,968 units so far this year.
The premium electric vehicle brand Zeekr, under the Geely Automobile Group, is also set to enter the South Korean market in the second quarter. Its first model to be launched will be the mid-size SUV “7X.” Zeekr positions itself in the high-end import vehicle segment, highlighting high performance and luxurious design.
Chinese brands’ successful soft landing during the initial phase can be attributed to the effectiveness of their cost-performance strategy. BYD possesses in-house developed batteries and electric vehicle platforms. Leveraging this advantage, BYD targets the entry-level EV market, offering vehicles with competitive range, features, and spacious interiors at affordable prices. In the context of rising interest rates and reduced government subsidies increasing the burden of car ownership, BYD effectively provides South Korean consumers with a “cost-effective imported electric vehicle” option.
Notably, Chinese automakers’ strategy goes beyond mere cost efficiency. While BYD enters the mass market with affordable pricing, Zeekr aims to penetrate the premium EV segment by emphasizing performance and design. Fundamentally, Chinese brands are now targeting the domestic market with diverse pricing tiers and distinct product strategies.
Experts analyze that the decline in Japanese car sales stems from sluggish responses to market changes and limited product portfolios. Professor Moon-Won Hoon from the Future Electric Vehicle Department at Ulsan University stated: “Japanese cars often struggle to keep pace with constantly evolving global market trends. Even in their domestic market, Honda and Nissan have failed to adequately meet changing consumer demands because they remain overly focused on existing models.”
Original Article: toutiao.com/article/1866433294342208/
Disclaimer: The views expressed in this article are those of the author(s).