Over 30 years, imported car registrations go from 10 to 225,279

Posted on : 2017-02-05 17:15 KST Modified on : 2019-10-19 20:29 KST
Once a status symbol, imported vehicles are no longe the exclusive domain of the wealthy
Registrations of imported cars in South Korea.  Data: Korea Automobile Importers and Distributors Association
Registrations of imported cars in South Korea. Data: Korea Automobile Importers and Distributors Association

In 30 years, the annual number of new registrations increased from 10 to 225,279 – of imported cars, that is. The history of imported vehicles mirrors the growth and opening of the South Korean economy. In the past, driving a foreign vehicle home for the Lunar New Year was a quintessential token of success, but imported vehicles are no longer necessarily viewed as the exclusive domain of the wealthy.

1987 was the inaugural year of the imported car market. In July of that year, the government allowed the import and sale of automobiles with an engine displacement of 2,000cc and above. Thus, the first 10 Mercedes-Benz cars imported by Han Sung Motor marked the beginning of official recordkeeping of imported cars. Back then, imported cars were the objects of popular criticism and envy.

To be sure, imported cars had been on the road even earlier than that. A report in 1984 found more than 2,900 imported cars that year. Since imported cars at the time were legally banned from passing through customs, these vehicles had not been officially imported. Most of them had been bought by foreigners living in South Korea – including diplomats and US soldiers – and then resold to South Koreans. Given the surplus in trade with the US, the government at the time also hoped that allowing the purchase of American vehicles would ease commercial pressure.

In 1988, import regulations were revoked for all cars, regardless of engine displacement. Sales increased from 263 in 1988 to 1,293 in 1988 and 2,325 in 1990. Half of these were cars that South Korean companies had assembled in the country through the OEM (original equipment manufacturer) method.

In the 1990s, the market began to open up even faster. Facing commercial friction with Japan, the US also asked South Korea to further open up its automobile market. This eventually resulted in a decrease of tariffs, registration tax and consumption tax on imported vehicles. After taxes were lowered, the Ford Sable sold for 2.26 million won ($US2,280).

Sales [continued to climb]: 3,865 in 1994, 6,921 in 1995 and 10,315 in 1996. Starting with BMW in 1995, foreign carmakers began to do business in South Korea directly by setting up local branches. But the imported car market was blindsided by the Asian financial crisis, driving sales down from 8,136 in 1997 to 2,075 in 1998.

The imported car market entered a recovery phase in 2001. It made up 1% of the domestic [car] market in 2002, and the number of vehicles registered annually topped the 100,000 mark for the first time in 2011. By the following year, imports’ share of the market exceeded 10%.

While imported cars were once regarded as conspicuous consumption, the Korea Automobile Importers and Distributors Association (KAIDA) argues that imports have had a positive effect by spreading and improving car culture. “Imported cars exhibited high quality not only in their performance but also in their safety and their amenities, serving as a catalyst for the technological development of domestic carmakers,” KAIDA said. 

By Ko Na-mu, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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