One of the French government's listed initiatives for aiding its ailing automotive sector, especially Peugeot, was asking the European Commission to keep an eye on imports from South Korea. The EU signed a free-trade agreement with South Korea last year, and France is concerned that might be exaggerating the loss of market share being suffered by its domestic makers – Europe-wide sales of South Korean cars rose by more than 20 percent last year in a market that is enduring painful contraction.

The EU says it has received an official request to monitor South Korean imports, according to a report in Reuters. Should the EU agree to the France's demand, it could mean instating "prior surveillance measures" that would compel the South Koreans to notify the EU of the number and type of products it planned to ship in advance.

No one is mentioning the reintroduction of tarrifs on South Korean automobiles, since even the EU Trade Commissioner is talking up the overall benefits of the free-trade agreement, but it is an option. The effect such a move would have on the French domestics' s situation is questionable, though; Hyundai's EU plants, such as those in the Czech Republic and Turkey, have produced 70 percent of its products registered in the EU, and Kia Motors Slovakia plant produces the duty-free and very popular Cee'd on top of the Sportage and Hyundai ix35. A Hyundai spokesman said just 12 percent of its EU product came from its home country.


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  • 32 Comments
      dukeisduke
      • 2 Years Ago
      "Exaggerating"? I think you mean exacerbating.
      Matrix
      • 2 Years Ago
      You can't blame South Korea for building better cars than the french.
        Sacto1654
        • 2 Years Ago
        @Matrix
        And the French are looking with envy at the very modern assembly lines the Hyundai Motor Group has in both the Czech Republic and Slovakia, plants that can easily expand production capacity and produce an expanded model range for the European market if necessary.
      throwback
      • 2 Years Ago
      Perhaps PSA and Renault should make more competitive cars and simply beat Hyndai on the product side. Just a thought.
        Walt
        • 2 Years Ago
        @throwback
        And how will they, or any automaker for that matter, make a "more competitive" car when sales and profits are falling?
          throwback
          • 2 Years Ago
          @Walt
          How did Ford do it? By having a plan, and executing on that plan. The French government has to face the fact that their car makers can't compete with the over capacity they have. Either they close factories, or the government has to subsidize them for the forseeable future. Instead they are asking to have Hyundai excluded from selling cars in the EU.
      Il Pilota
      • 2 Years Ago
      What a load of crap. Managing competitiveness through protectionism rather than increasing its own competitiveness does not sound like a healthy style of management. And I would agree if South Korea has an unfair illegal advantage like China with their abusing of intellectual property, government subsidies, banning trade unions etc, but that's not the case is it?
        Shiftright
        • 2 Years Ago
        @Il Pilota
        You're right until you see how Asian governments protect their markets
      Myself
      • 2 Years Ago
      PSA doesn't build cars people want. Period.
        Shiftright
        • 2 Years Ago
        @Myself
        Not true in the least, it's just that the Koreans are cheaper, and they're willing to take a loss on product to flood the market. The Koreans are less than sportsmanlike in business, speaking from previous experience. I stopped doing business with Korean firms for this reason. Have you driven any Pugs at all lately? They're damn fine cars, and yes, well built.
      Keldon
      • 2 Years Ago
      Slow news day huh Autoblog?
      imoore
      • 2 Years Ago
      "The only way the French can stay competitive with their labor force & current structure of laws/benefits is through protectionism." France did it before in the 1980's and 1990's to slow down the Japanese invasion. They should be able to do it again, except for the simple fact that they need EU approval to do so. That partly explains why the French desperately wants to get out of the European Union - France has always been exception in Europe; they don't like to answer to anyone. Much like Quebec's feelings about its status in Canada.
        Val
        • 2 Years Ago
        @imoore
        But the EU, the common market, and the Euro currency are ALL french inventions, they had a leading role in all of them. Turns out germany was able to better benefit from the french plans... as it always happens. Slovakia and czech republic and poland are just killing the french factories
        cooker263
        • 2 Years Ago
        @imoore
        It also explains why the French have a lower standard of living. If you can get something cheaper from somewhere else, it effectively increases the purchasing power of the people of the country. The freed up resources can be used to create capital to build new industries, products, and services. I'm all for national sovereignty, but it's important to not forget how this works from an economic perspective.
          miles
          • 2 Years Ago
          @cooker263
          Cooker, you've got the theory right, but reality sometimes intervenes. I can buy 1 bicycle made locally, or 2 from China due to the many different flavors of "gaming the system" they do to tilt the field in their favor. Being richer by 1 bicycle does not always balance being poorer by the benefits of making that bike locally, in the real world. That'sthe difference between what you are advocating - which is sound economic policy (for the whole system) in theory. Now how do we deal with China - which acts on sound economic policy (from only their viewpoint) in practice?
      Seph
      • 2 Years Ago
      I guess, those french carmakers should really voice some concerns, since the s.korean won is unbelivably low.
      Walt
      • 2 Years Ago
      How many imported French autos sold in South Korea in the past year? Anyone?
        Sir Duke
        • 2 Years Ago
        @Walt
        That is exactly the point. Japan, South Korea and China all are guilty of protectionism. They'll try to flood your country with their goods (superior/inferior) doesn't matter, but they throw up obstacles to you sending your goods there. The blind ideologues who believe that the the world is a perfect place, and everyone plays by the rules, act as if none of this matters. Trade agreements should work for ALL parties EQUALLY.
          luigi.tony
          • 2 Years Ago
          @Sir Duke
          I challenge YOU to provide some evidence of Japan limiting imports. In contrast, I'll give the example of the USA taxing Japanese trucks 25%. Your turn.
        Famsert
        • 2 Years Ago
        @Walt
        Probably very little. French autos are pretty garbage in general. Sir Duke: um.. China LOVES foreign products. You don't have a clue.
      Georg
      • 2 Years Ago
      PSA, Renault, Fiat should work on their model lineup and reliability problmes ... VAG BMW and Mercedes are doing extremly well on the europen market even in the worst time of the crisis... for example VAG 1. half 2012 win after tax 8.8billion Euro (~ $11billion) +35.9% over record year 2011! Hyundai and KIA ´s big plus in Europe is not made in France it is mainly made in Germany the biggest market in Europe which is completely untouched by the EU crisis (2011 +8.8%, 1.half 2012 +0.7%) In Germany south Korean producer win (+27.1%), frensh (-5.3%), italian (-8.9%) and japanese (-4.2%) producer loose badly...while the German producer (+0.4%) can increase slightly on a very high level (64% of the market) PSA trouble is home made... workers not working long enough and getting to much money for average work...
      anakrino7
      • 2 Years Ago
      That's weakness and it shows on the E.U.'s part. South Korea produces excellent products which scares the living daylights out of the competition. That's just ridiculous. Let South Korea do their thing, they know what they are doing. Their customers love their cars and their customer support, maybe some of the competition need to pull their head out and find a way to be friendly and not a sanctioning system that is barbaric to success. Unbelievable.
      cooker263
      • 2 Years Ago
      The only way the French can stay competitive with their labor force & current structure of laws/benefits is through protectionism. While this may benefit some assembly worker in the short run, it makes the entire country poorer and less free. The benefits of free trade are pretty obvious to anyone who has taken a legit econ 101 class.
        rlog100
        • 2 Years Ago
        @cooker263
        Seems to have worked out well for China, South Korea and others.
          vdub
          • 2 Years Ago
          @rlog100
          " If the French can't make cars cheap, maybe they would be better at something else." Like what? Complain a lot and riot over silly things? They are a capable country, with an extremely lazy mindset.
          cooker263
          • 2 Years Ago
          @rlog100
          Protectionism makes you poorer. Sure, you may have a job, but your standard of living is still reduced. You're restricting capital to less efficient avenues, thus wasting resources. If the French can't make cars cheap, maybe they would be better at something else.
          rlog100
          • 2 Years Ago
          @rlog100
          @cooker, yep keep quoting scripture while China becomes the World's economic powerhouse at our expense, literally. Maybe free trade would be better overall. But being on the short end of the stick on non-free trade situation isn't the same as free trade or even halfway there either. Its just stupid.
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