Mercedes-Benz shows highest per-hour repair costs

By Kim Tae-jong

Kim Min-sung, a 35-year-old office worker in Seoul, has recently given up on the idea to buy Volkswagen’s Tiguan, which he had long wanted to have. Instead, he chose another SUV from a local brand over the imported vehicle.

“I think the Tiguan is better than most local SUVs in many ways,” he said. “However, although many foreign cars are more affordable now, imported brands are still notorious for high repair costs, and most importantly, you have to wait a long time due to a lack of components.”

Like Kim, many drivers here said they are concerned about high maintenance costs and inconvenience in after sales services when they consider buying an imported car.

According to the latest research by the Korea Consumer Agency (KCA), the number of service centers for imported car brands is far too low here.

The KCA found the ratio of cars per repair center is the highest for Mercedes-Benz at 3,672, followed by BMW at 3,306, Volkswagen at 2,677, Honda at 2,625, Audi at 2,589, Lexus at 2,519 and Toyota at 1,794.

“The higher the ratio is, the longer a car owner may have to wait for their car to be repaired,” an official from the agency said.

The research also revealed that the hourly rates charged at service centers operated by imported car brands were twice or more that of the rates for local cars.

At Mercedes-Benz service centers, an hourly rate of 68,000 won is charged while BMW service centers charge 60,000 won per hour. In comparison, the average for Hyundai Motor garage is estimated between 35,000 won to 45,000 won per hour.

The costs of repairing imported vehicles in Korea also run much higher due to expensive parts.

The prices of front bumper, rear bumper, headlight and the hood for a Mercedes-Benz E300 are 1,009,580 won, 1,017,500 won, 2,084,170 won and 1,467,180 won, respectively, while the prices for the same parts for a BMW320i are 615,340 won, 674,300 won, 1,004,080 won and 572,990 won. Of course, they are more expensive than the equivalent parts by the Hyundai’s sedans.

Importers say that the price gap between imported and domestic car parts is mainly due to the fact that parts for imported vehicles are not produced locally; but they are also more expensive than parallel imports by about 10 percent on average, according to the research.

The result is especially disappointing amid the growing presence of imported cars here, with the share for foreign brands accounting for almost 10 percent.

According to the Korea Automobile Importers and Distributors Association, a total of 523,884 vehicles have been sold this year as of the end of May, and of them, 51,661 were foreign brands.

Regarding the mounting criticism and complaints, foreign brands said they will build more facilities to minimize customer inconvenience and lower repair costs by encouraging more parallel imports of auto parts.

“As a top automaker, we will do our best to provide utmost services to customers to live up to our reputation, and do our best to expand our service networks and continuously improve the overall quality,” an official from Mercedes-Benz said.

To tackle the inflated repair costs, the KCA also suggested that there should be reliable measurement solutions regarding repair claims so that repairs at service centers of imported car brands can be conducted in a more transparent way.

Experts also pointed out that imported car brands should invest more in facilities for after sales services, which will also help increase their market shares.

“As they think the Korean market is growing steadily, they need to make a longer-term investment here to increase the size of the pie, although it may not immediately lead to profits,” professor Kim Pil-soo at Daelim College said.