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South Korea: Auto exports to EU rise despite shrinking market
Korea-EU FTA helps boost car exports to Europe: ministry.
Korea’s auto exports to the European Union last year surged 42.8 percent from the previous year thanks to the bilateral free trade agreement, the Ministry of Knowledge Economy said Monday.
Korean carmakers’ exports to the EU had declined between 2005 and 2010 as they increased overseas production and diversified export destinations. The EU passenger car market also shrank for four years in a row amid growing fiscal uncertainties in the eurozone since the financial crisis in 2008.
Their exports last year, however, jumped 42.8 percent to 426,057 vehicles due to stronger marketing, falling sales of Japanese cars and the Korea-EU FTA which took effect in July, the ministry said.
Korean carmakers’ exports to the EU showed an average monthly growth of 83.7 percent since May, after Japanese rivals suffered an earthquake and two months ahead of the tariff cuts due to the FTA.
As of July last year, the EU tariff rates for Korean vehicles were cut from 10 percent to 8.3 percent for cars with engine displacements of 1,500 cc or less, and to 7 percent for larger ones.
Considering European customers’ preference for fuel-efficient compact cars and hatchbacks with larger interior space, Korean automakers exported mostly small cars such as the Spark, Morning, Pride, Cruze, Aveo and car derived vans including the Captiva, Orlando, i40 and QM5.
Hyundai Motor Co. and Kia Motors Corp. offered a five to seven-year warranty service and a 30-day money-back guarantee.
Korean carmakers’ production in the EU has marked an average annual growth of 36.5 percent since 2007 to 503,398 vehicles last year. Hyundai and Kia have run factories with an annual production capacity of 300,000 units each in the Czech Republic since 2008 and in Slovakia since 2006.
In January, passenger car sales in the EU dropped 6.6 percent from a year earlier, but Korean auto exports swelled 79.7 percent.
In February, the five Korean carmakers’ total exports climbed 51.2 percent from a year earlier to 299,053 units.
Thanks to the robust exports and more business days, their domestic production increased 41.8 percent year-on-year to 421,789 units in February.
Their domestic sales in February gained 7.2 percent from a year before to 122,761 units, while sales of import cars jumped 35.8 percent to 9,196 units.
The Toyota Camry was February’s bestselling import car with sales of 721 vehicles.
The market share of import cars stood at 7.5 percent last month, down from 8.9 percent in January.
Source: The Korea Herald - GAI
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