Bloomberg reports shifting tariff regulations have upended the traditional automotive pecking order in Korea. Thanks to cheaper import taxes, foreign brands have seen market share jump from 28 percent to 41 percent over the last two years. BMW, Mercedes-Benz and Audi have all capitalized on the shift, with domestics like Hyundai and Kia suffering at the hands of their German rivals.

Taxes on European imports have fallen from 8 percent in 2011 to just 3.2 percent today. Over the next few years, tariffs will all but be eliminated for most imports, and taxes on US-made vehicles are expected to fall to just 4 percent in 2014. By 2016, that number will be zero. Needless to say, Hyundai and Kia are concerned about the shift.

Hyundai has seen profit fall by 15 percent last quarter, and the company says it is on pace to see the slowest sales growth since 2007. The company's shares have fallen by 12 percent. In order to stem the losses, Hyundai has discounted its midsize sedans and started working on diesel engine options.


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  • 42 Comments
      Polly Prissy Pants
      • 1 Year Ago
      Interesting article but stupid link-bait premise. Twist things just right and you can say Chevys (a Suburban) cost more than BMWs (a 320i). A loaded out Hyundai Equus is over $67,000.
      Clipper44
      • 1 Year Ago
      The headline of this article (on AB) is misleading. German cars are cheaper in Korea because well... they're cheaper. It's not because of a tarriff reduction. The lower tarriffs are simply making imports a better cost alternative; as 5% drop is significant. Combine that with Koreans viewing domestic Kia and Hyundais as bloated and stale, and you have BMW and Mercedes gobbling up market share.
      William
      • 1 Year Ago
      "Why BMWs are cheaper than Hyundais in Korea" What's up with the headline? Some BMWs are cheaper than Hyundais here in America too. Some BMWs are more expensive than Hyundais here in America and in Korea too. A more accurate headline would be something like, "Why BMWs are now cheaper in Korea than in previous years".
      diffrunt
      • 1 Year Ago
      Wonder how many kraut paid lobbyists it took to swing that deal.
      Brodz
      • 1 Year Ago
      Having the same problem here in Australia. I'm a firm believer in tariffs.
      knightrider_6
      • 1 Year Ago
      On the other hand, once the Koreans start buying German car, they will soon realize how bland and poorly built they are and will go back to Hyundai and Kia.
        Jefe Grande
        • 1 Year Ago
        @knightrider_6
        What language are you speaking? It's weird, the words you are writing seem to be in English, but they make no sense in the sequence you've written them.
        sennarose88
        • 1 Year Ago
        @knightrider_6
        Nice try Hyundai fanboy -- or just can't afford those nice German engineering.
      xspeedy
      • 1 Year Ago
      Seriously? Five percent reduction in tariff makes a BMW cheaper than a Kia? Something doesn't add up.
        adam.brentzel
        • 1 Year Ago
        @xspeedy
        My thoughts exactly, Hyundai could almost make sense if you compare the top of their range (Genesis & Equus) with the bottom half of BMW's (1,3 & 5 series). But if Kia makes anything that comes close to competing in that area of the market I haven't heard about it. And presumably Korean domestic companies have never been subject to the taxes in question.
      Rochester
      • 1 Year Ago
      Now if only those less expensive BMW's would break down less, and cost less to repair, Korean consumers would have a winner!
      Scooter
      • 1 Year Ago
      From experience with friends and once I owned a Kia Spectra, you get a lot of minor mechanical issues. Fuses, bulbs, wiring, paint, and overall materials age really, really bad in Hyundais and Kias. Performance specs are always bloated figures for sales. Just speaking from personal experience, and my reasoning to never own a Kia/Hyundai car.
        Emil
        • 1 Year Ago
        @Scooter
        From experience of myself & friends, Hyundai (2 Sonata and 1 Elantra) is not worse, and has been even better than famous Toyota (2 Corolla) & Nissan (1 Alitima & 2 Sentra) in this regard. For sure it's a very limited sample but yours is too.
      knightrider_6
      • 1 Year Ago
      That doesn't sound good for Hyundai. Even in US market, the new S-Class has a slight edge over Equus in terms of features (even though that is compensated by poor German quality).
        knightrider_6
        • 1 Year Ago
        @knightrider_6
        That being said, the 7-Series and A8 are still way behind Equus in every respect. Other than the brand hype, those two turds have no chance affecting Equus sales.
          Miguro Takahashi
          • 1 Year Ago
          @knightrider_6
          Your comment makes no sense. The 7 series and the A8 were present in the market before the Equus. The BMW 7 was established in 1977 and the A8 in 1994. The Equus didn't arrive until 1999 and the first generation barely had a market outside of its vicinity. So far in 2013, there have been less than 1500 Equus sold in the US. The 7 series has sold twice that amount in the same timespan at a less accessible price. The Audi A8 has moved more than 2000 units as well in 2013. You're talking out of your @ss.
      Stanluca Liu
      • 1 Year Ago
      2013 Kia Optima EX Hybrid MSRP $31,950 BMW 128i Coupe MSRP $31,200. Gotta compare Apples to Apples people.
        ZOZ
        • 1 Year Ago
        @Stanluca Liu
        I am wondering which stupid will cross-shop a 128 coupe & a Sonata/Optima!
      Shashank Redemption
      • 1 Year Ago
      This is why I hate autoblog, such a poorly written article with false numbers being thrown out.
        Basil Exposition
        • 1 Year Ago
        @Shashank Redemption
        You can't call out someone for false number unless you include the correct numbers with source cited.
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