Carmakers bet on diesel market

Malibu Diesel, launched by GM Korea in March 2014, is popular in the local market. The midsize diesel powered sedan was sold out in less than two months, making other local carmakers jump into the diesel car business. / Courtesy of GM Korea

By Park Jin-hai

GM Korea and other local carmakers are gearing up to gain a bigger share of the diesel car market, currently dominated by imported vehicles.

Diesel engine powered cars have been enjoying a sales growth, backed by the appeal of higher fuel efficiency, which is 20 to 30 percent better than those that run on regular gasoline. Last year, diesel engine car sales exceeded those of regular gasoline powered vehicles for the first time.

“Part of the popularity of imported cars could be explained that they run on diesel. Customers nowadays pay more attention to fuel efficiency, since gas price has never been cut down,” said Suh Sung-moon, market analyst at the Korea Investment & Securities.

In the four months leading up to April, a total of 42,090 foreign diesel cars were imported, amounting to 68.8 percent of all imported cars sold in the same period.

The competition might become fiercer, because major local automakers are competitively launching new models and seeking to attract customers with more affordable and improved fuel efficiency, say market insiders.

“The race is on. Not only us but many other car makers are introducing new diesel line-ups,” said a public relations staffer of GM Korea, which launched a midsize diesel powered sedan, the Chevrolet Malibu Diesel, in March.

It sold 522 units in April, where its maximum production capability is 500. That accounted for 30.3 percent of all Malibu cars it sold that month. Within 45 days, it sold out all the Malibu Diesels released on the market, and customers are on a waiting list to purchase its 2015 models.

“We first introduced a smaller model in 2009. It maintained 25 percent of all car sales generated by that model each year. Boosted by its popularity, we came to launch a bigger version,” he said.

Renault Samsung Motors joined the race by selling small diesel models from last month. It plans to add mid-sized models to the diesel line in the latter half of this year.

The country’s top automaker Hyundai Motor will also unveil a 2.2 L - diesel engine powered luxury sedan Grandeur during the Busan International Motor Show, to be held from May 30 to July 8.

“The fuel efficiency gap between Korean cars and imported ones has been narrowing. Customer perceptions of diesel cars as noisy vehicles that have belching exhausts are changing, too. They start to think that higher fuel efficiency of diesel cars could also mean that they are environmentally friendly. So the current popularity of diesel cars will continue in the coming years,” Suh said.