Autoblog

Goes Both Ways: Free-trade pact sees South Korean brands losing share at home

Jonathon Ramsey — Sat, 29 Dec 2012 11:00:00 EST

Filed under: Europe, Government/Legal, Hyundai, Kia, South Korea

France has been vocal, but not alone, in noting the rise of the South Korean automakers in Europe. The signing of a free-trade pact in 2011 between South Korea and the EU, along with the especially value-conscious buyers in a crisis-stricken Europe, has seen market share increases measuring in the double digits for Hyundai and Kia - analysts expect 14-percent growth for the two in 2012.

A report in Bloomberg has found that there's pain at the other end, too: The pact more than halved import tariffs on European cars headed to South Korea to 3.2 percent, and prices are now close enough to domestic offerings for more South Koreans to pay the premium for foreign luxury nameplates and the cachet they confer. Products sold by the five domestic automakers hogged 92 percent of the market last year, and sales have dropped 5.2 percent this year whereas import sales have risen by 24 percent. This will mark the first year that imports claimed ten percent of the market; compare that to 2002, when domestic market share in the world's 11th largest auto market was 99 percent.

The Germans are at the head of the arrow, counting for 65 percent of imported car sales, but every foreign maker has seen double-digit gains. Analysts think foreign makes could ultimately grab 15 percent of the market.

The US signed a free-trade agreement with South Korea last year after years of back-and-forth negotiations. The import tariff on US cars was halved to four percent, and by 2016 there won't be any tariff at all. The hope is that the deal will quickly mean the US will be able to export and sell more than a miniscule fraction of cars to the Asian nation's buyers; the US Internal Trade Commission predicts a 54-percent climb in exports to the country is possible. A side beneficiary of the deal is the Japanese makers: With no free-trade deal between their home country and South Korea, manufacturers like Toyota and Honda are now looking forward to sending more of their American-made product to the peninsula.

Goes Both Ways: Free-trade pact sees South Korean brands losing share at home originally appeared on Autoblog on Sat, 29 Dec 2012 11:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

France requests EU surveil South Korean imports

Jonathon Ramsey — Fri, 10 Aug 2012 08:28:00 EST

Filed under: Europe, Government/Legal, Hyundai, Kia, South Korea

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.

France requests EU surveil South Korean imports originally appeared on Autoblog on Fri, 10 Aug 2012 08:28:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

U.S. reportedly asks South Korea to adopt American emissions, safety standards

Jonathon Ramsey — Mon, 01 Nov 2010 08:01:00 EST

Filed under: Government/Legal, South Korea

The powers-that-be in the States are working on getting the go-ahead for a free trade agreement, like NAFTA, but this time with South Korea. The agreement itself was signed and sealed in 2007, but it hasn't actually gone into effect yet because Congress won't approve it, and that's because of two hangups, one being emissions regulations that the U.S. maintains is a non-tariff barrier to selling cars in in South Korea.

One South Korean analyst said that "even if South Korea accepts American safety and emissions standards," the current 10.1 percent of imported car market share held by American cars won't change much. That share has dropped year-on-year, and with the agreement in effect and a push to increase exports, the U.S. would like a proper shot at turning that around. European makes, on the other hand, have 62% market share. The two countries will confer next month on the sidelines of the G20 meeting in Seoul in a final effort to harmonize and implement the trade agreement.

[Source: Automotive News - sub. req'd]

U.S. reportedly asks South Korea to adopt American emissions, safety standards originally appeared on Autoblog on Mon, 01 Nov 2010 08:01:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Report: Korean ambassador stumps for more U.S. car sales in home market

Zach Bowman — Fri, 20 Aug 2010 10:00:00 EST

Filed under: Car Buying, Government/Legal, South Korea

Han Duk-soo, the South Korean ambassador to the United States, recently urged the Detroit Chamber of Commerce to embrace increasing automotive imports from his country. Talk about a tough sell. However, the move would be part of a deal that would open South Korea to cars built in America - a market that has been notoriously protected by tariffs and other barriers. Duk-soo said that eliminating America's 2.5 percent tariff on cars built in South Korea would allow his country to do away with its eight percent automotive import tax at the same time.

Without a doubt, Ford, General Motors and Chrysler wouldn't mind diving deeper into a new consumer pool, but according to Representative Sander Levin (D), the U.S.-South Korean Free Trade Agreement needs significant revision before it can provide "meaningful market access" between the two countries. Lawmakers and manufacturers currently say that the agreement isn't adequate enough protection for U.S. exports to keep them from running into additional regulations that may hinder their sale in South Korea.

Meanwhile, Duk-soo says that perception is a misunderstanding, and that while his country's auto market was protected in the past, it's now open to imports. The ambassador even pointed to increasing U.S. auto sales in Korea even despite the hurdles. According to The Detroit News, April U.S. auto sales in the country were four times what they were in 2009, driven largely by the popular Ford Taurus.

[Source: The Detroit News]

Report: Korean ambassador stumps for more U.S. car sales in home market originally appeared on Autoblog on Fri, 20 Aug 2010 10:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Michigan and Ohio senators demand Obama gets tough on South Korean auto importing

Zach Bowman — Tue, 20 Jul 2010 14:28:00 EST

Filed under: Government/Legal, Hyundai, Kia, South Korea

Talk to most analysts in the auto world, and they'll say that the recent rise of South Korean automakers like Hyundai and Kia have been an absolute blessing to the industry as a whole. Consumers now have an array of quality, inexpensive products, extra jobs have landed in rural areas of the deep south thanks to American-based manufacturing facilities and the competition from low-priced models have forced domestic manufacturers to up their game.

But not everyone's thrilled about the balance of automotive trade between the two nations. According to The Detroit News, senators Debbie Stabenow, D-Michigan, and Sherrod Brown, D-Ohio, recently wrote to the Obama administration in order to urge the President to take a hard line on the South Korean Free Trade Agreement.

The two senators aren't taking issue with Korean products here in the U.S., they simply think it's unfair that South Korea has made it economically difficult to import vehicles into the country. The senators want American companies to have the opportunity to do business on the peninsula - something that most automakers, with the exception of General Motors, have been pushing for since before the second President Bush was in office. GM, meanwhile, owns Korean automaker Daewoo, so it has no problem dealing with the current ban on auto imports.

For its part, Obama administration has said that it will once again open talks about the free trade agreement in hopes of making more American goods available in the global market.

[Source: The Detroit News | Image: Ted Aljibe/AFP/Getty Images]

Michigan and Ohio senators demand Obama gets tough on South Korean auto importing originally appeared on Autoblog on Tue, 20 Jul 2010 14:28:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments