Luxury carmakers suffer drastic sales fall amid economic doldrums

A staff member looks at Tesla's new Model 3 sedan displayed next to a Model X SUV at the China International Fair for Trade in Services (CIFTIS) in Beijing, Sept. 2, 2023. Reuters-Yonhap

A staff member looks at Tesla’s new Model 3 sedan displayed next to a Model X SUV at the China International Fair for Trade in Services (CIFTIS) in Beijing, Sept. 2, 2023. Reuters-Yonhap

Tesla achieves stunning rise in Korea as Porsche, Bentley struggle

By Lee Min-hyung

Sales of overseas luxury carmakers plummeted in Korea for the first half of this year amid freezing customer sentiment triggered by prolonged high interest rates and economic doldrums, according to data and company officials, Sunday.

According to the Korea Automobile Importers & Distributors Association (KAIDA), only a few foreign carmakers — Tesla, Toyota Motor and Honda Motor — reported rises in their sales here.

Bentley was hit hardest by a sales decline of 63.7 percent in the first half of 2024 from a year earlier. Porsche and Land Rover also reported sales falls of 42.8 percent and 33.5 percent respectively during the same period. Audi also extended its losing streak, with its sales dropping by 62.6 percent.

Officials from the car industry here attributed their sales falls to customers’ growing preference for price-competitive hybrid cars.

“Amid the high interest rate that has persisted for years, customers have felt a sense of growing financial burden in purchasing typical luxury cars,” an official from a carmaker said. “Japanese car brands and Tesla, however, seem to have widened their presence thanks to their strategy to focus on hybrid and electric vehicles (EV).”

Toyota sold a total of 4,535 cars for the first six months combined, up 14 percent from a year earlier. Honda attained much bigger sales growth of 116.6 percent during the same period.

The 2024 Toyota Prius / AP-Yonhap

The 2024 Toyota Prius / AP-Yonhap

Tesla’s rise was also noteworthy. The U.S. EV maker’s Model Y and Model 3 placed their names on the nation’s best-selling and second-best-selling overseas vehicles in the first half.

Tesla sold around 17,300 cars between January and June in Korea, and was ranked as the country’s third-most-popular imported car brand following BMW and Mercedes-Benz.

“The growing popularity of Tesla EVs particularly from the young generation poses a threat to the presence of BMW’s 520 mid-sized sedans and Mercedes’ E-Class lineup,” the official said.

Most other foreign carmakers also ended up losing ground here for similar reasons.

Sales for Volvo vehicles plunged by 15.1 percent during the period, data from the association showed. Lexus also suffered a slight sales decline of 7.6 percent. The company defended relatively well against the unfavorable market sentiment, as most of its vehicle lineup is hybrid cars.

BMW maintained its leadership in terms of car sales here. It sold more than 35,000 cars in the first half, accounting for a 28 percent market share in imported cars. But this is still a drop of 7.8 percent from the previous year. Mercedes-Benz came in second with sales of over 30,000 during the same period, a fall of 15.3 percent from a year earlier.

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