Sales of imported cars to grow 12% in 2012

Sales of imported vehicles in South Korea are expected to grow about 12 percent on-year in 2012, fueled by steady consumer demand for foreign cars, a trade association said Wednesday.

A total of 119,000 units are expected to be sold in the local market in the new year, compared to an estimated sales figure of 106,000 vehicles for 2011, the Korea Automobile Importers and Distributors Association (KAIDA) said.

"There may be a slight decrease in the growth rate, but the popularity of smaller-sized cars with engine capacity under 2-liters should help maintain recent consumer demand for imported models," the association said.

Compared to the past when businesses were major buyers, private purchasers of vehicles and young drivers in their 30s will bolster sales in the future, it said, adding such a development should raise demand for more eco-friendly, fuel-efficient cars.

KAIDA also said that new models to be released by U.S. carmakers, and Japanese carmakers operating in the U.S., should see improved sales after the proposed free trade agreement (FTA) with Washington, which could go into effect in January 2012.

The FTA calls for import duties on U.S.-made cars to be halved immediately to 4 percent with the rest to scrapped in due course.

The trade association, however, said that uncertainties facing both the global and domestic economies may exert negative influence on sales, along with unforeseen fluctuations in exchange rates. (Yonhap)