By Jhoo Dong-chan
European automakers have enjoyed more benefits than their Korean counterparts since the Korea-EU free trade agreement (FTA) took effect five years ago. Korean automakers have not seen tariffs lowering as much as their European counterparts have.
According to the Korea Automobile Manufacturers Association, Tuesday, domestic automakers’ exports to the European market jumped 28.6 percent, from 298,263 cars in 2010 to 383,698 in 2015.
The number of cars imported from Europe more than tripled from 59,242 cars to 197,396 in the same period, the Korea Automobile Importers and Distributors Association said.
Likewise, European cars’ share of the domestic imported car market surged from 65.4 percent to 80.9 percent while Japanese and U.S. cars’ shares plunged from 26.4 to 11.9 percent and 8.2 to 7.2 percent, respectively. The European Commission also delivered a similar report to the European Parliament and the EU Summit last month.
European automakers’ exports to Korea were only worth 2 billion euros with 74,600 cars in the July 2010-June 2011 period but more than tripled to 6.1 billion euros with 219,000 cars in the July 2014-June 2015 period.
Domestic automakers, meanwhile, enjoyed only a 54 percent increase in export volume from 2.6 billion euros to 4 billion euros during the same period.
The data also said that domestic auto parts exports to European market surged 36 percent to 3 billion euros while European auto parts coming to Korean market rose 18 percent to 1.2 billion euros.
Industry watchers believe European automakers’ advance in the domestic market will continue for a while.
Hyundai Motor and Kia Motors have been operating manufacturing plants in Slovakia since before the Korea-EU FTA.
Experts expect that there will be more European cars in Korean streets since the tariff-free policy under the agreement has been fully implemented on eco-friendly and compact cars under 1,500cc starting July 1.
“European auto brands, now with price competitiveness through the FTA, are expected to increase their market share here when the eco-friendly vehicle market is introduced in full,” said an expert.
“Domestic automakers should not only diversify their sales strategies overseas but also do their utmost to secure decisive eco-friendly technologies.”