Are Koreans Taking Over Europe?
|   Saturday, November 17, 2012
While European automakers reduce, or plant to, their production of vehicles and close a number of factories, auto manufacturers from South Korea Hyundai and Kia are registering record sales. According to data provided by ACEA ( Association des Constructeurs Européens d'Automobiles), sales on the European market in the first nine months went down by 7.2 percent; in the same time Hyundai reported an increase of 9.6 percent and Kia went up by 20.5 percent.


Due to the new trade agreement between the EU and South Korea, auto manufacturers like Hyundai and Kia have gained significant market share. "We must determine whether the free trade deal with South Korea is providing all the benefits expected at the time of its signing," said Fiat boss Marchionne at the Paris Auto Show in September.

EU tariffs on cars from South Korea went down to 6.6 percent for small cars and 4 percent for large ones. Prior to the trade agreement taxes were at 10 percent. These fees will disappear completely in 2015. Imports from South Korea have increased substantially since the new commercial treaty began taking effect in 2011.

Marchionne said, via Autonews: "I think it is almost a miracle, since the European market has been down for the past five years, while their imports have increased disproportionately compared to our exports in Korea." Sales of Kia models coming from Korea skyrocketed by 68 percent to 108,773 units, in the first eight months of the year.

The tactics used by Kia in Europe are quite simple: it imports small cars like the Rio and Picanto from Korea, and builds larger vehicles such as the Sportage, Cee'd and Venga in Slovakia. In the first eight months, imports made up 54 percent of Kia's sales in Europe, rising from 46 percent the previous year.

The other player, Hyundai only imports the i40 mid-sized car, Santa Fe large SUV and Veloster coupe from its home country. The i10 minicar is also imported, but from India this time. It generates about 15 percent of European sales.

Hyundai builds most of its European lineup (i20 subcompact, ix20 small minivan, and the i30 compact, ix35 medium SUV) in the Czech Republic and Turkey, saving money due to low wages.

In the first eight months of 2012, Korean exports to Europe went up by 15 percent to 281,529 units, according to Eurostat. In spite of this, present Korean success lags behind, well behind, the record seen in 2007, when about 640,000 units were shipped to Europe. On the other hand, European vehicle exports to Korea saw the same 15 percent in the same time frame,but at 58,363 units, they remain substantially below what Korea is shipping into Europe.


This obviously means that European automakers aren't seeing comparable benefits from the trade treaty. Value wise, Korean exports to Europe went up 23 percent reaching 2.7 billion dollars in the mentioned period, while European exports to Korea increased just 16 percent to 1.5 billion dollars, according to the same Eurostat figures. Compared to last year, when the auto trade deficit was less than 900 million dollars, almost 1.2 billion dollars have flown from Europe to Korea.
PHOTO GALLERY
Comments:
Name required * Email required Email not valid *
Comment required *

Latest news
Sunday, August 19, 2018 10:30:31 Nissan is present at the Detroit Auto Show with a compact concept SUV called...
Saturday, August 18, 2018 10:25:17 Another Hyundai premiere at the Detroit Auto Show is the new Veloster N,...
Friday, August 17, 2018 10:20:24 The South Koreans from Kia presented at the Auto Show in Detroit the new...
Thursday, August 16, 2018 10:15:59 After a massive promotion campaign, the US subdivision of Hyundai has officially...
Wednesday, August 15, 2018 10:05:55 Acura boasted that the new RDX is 100% made in the United States and is...
Tuesday, August 14, 2018 09:54:10 At the core of the new VW Jetta is the MQB platform, which is already used...
Tuesday, August 14, 2018 09:50:38 General Motors held the world premiere for the new generation Chevrolet...
Monday, August 13, 2018 09:45:39 The Ram Trucks brand, currently belonging to Fiat Chrysler Automobiles,...
Sunday, August 12, 2018 09:39:52 Ford brought the new generation mid-size Ranger pick-up at the Detroit Auto...
Saturday, August 11, 2018 09:34:13 At the Auto Show in Detroit, American car manufacturer Ford celebrates the...