In 2017, approximately 1.7 million vehicles were sold in South Korea, with Hyundai Motors sold 688,939 vehicles, while Kia sold 521,550, collectively representing 67% of market share. Other companies with local production bases include Renault Samsung Motors, SsangYong Motor Company, and GM Korea. According to the Korea Automobile Importers & Distributors Association (KAIDA), 233,088 imported cars were registered in 2017, with the largest imports from Europe. Some of the best-selling imported passenger cars include BMW, Mercedes-Benz, Audi, Volkswagen, and others.
Summary
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South Korea
Market Entry & Demand
For a foreign, imported vehicle to be registered in the local market, the importer or manufacturer needs to undergo a homologation process which requires a safety standard self-certification, emission & noise certification, and fuel economy test, as stipulated by the pertinent Act(s) of the Ministry of Land, Infrastructure and Transport (MOLIT), Ministry of Environment (MOE), and Ministry of Trade, Industry and Energy (MOTIE). The designated, official importer can directly import new foreign passenger cars from the foreign manufacturer, which can thereby be further distributed by the official importer’s nationwide distribution channels or dealers.
Korean auto part suppliers retain strong, established business relationships with domestic automakers. Korean consumers also depend highly on OEM’s aftersales service networks (i.e. Kia Motors’ Auto Q). It is more common for Korean car owners to get their car serviced by an OEM-affiliated shop than by independent auto shops. As a result, U.S. suppliers need to be aware of the competitive environment and local distribution channels in Korea. U.S. products need to offer technological advantages that competitors do not provide, and U.S. suppliers need to educate end-users about the advanced features of their products. When entering the Korean market, it is strongly recommended to partner with a qualified and capable Korean distributor. Exhibiting at local automotive trade shows can be a useful platform to explore the market and gain exposure to end-users.
South Korea has rigid safety and environment control standards for automobiles. Positive progress has been made by way of months of negotiations by the Office of the United States Trade Representative (USTR) and the Ministry of Trade, Industry and Energy (MOTIE) of Korea. Please refer to the overview on the outcomes from KORUS FTA amendment and modification negotiations [https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/march/new-us-trade-policy-and-national].