Luxury van market heats up in Korea as Mercedes-Benz joins rivalry with V-Class

Mercedes-Benz Korea has entered the nation's fast-growing luxury van market with the V-Class, intensifying competition in a segment previously dominated by Toyota’s Alphard and Lexus LM.

The German luxury carmaker launched Wednesday the seven-seat V-Class as a single-trim model priced at 124 million won ($92,700), targeting customers looking for a premium vehicle that combines passenger capacity with a high level of comfort.

The launch comes as demand for high-end vans grows in Korea, particularly among business executives, celebrities and families seeking more spacious and comfortable transportation.

Toyota and Lexus have established a strong presence in the segment with their Alphard and LM models, respectively. The two brands have benefited from growing demand for premium multipurpose vehicles that offer more space and comfort than conventional luxury sedans and SUVs.

The arrival of Mercedes-Benz is expected to intensify competition by giving consumers another premium option. The V-Class luxury van is only available for a diesel powertrain here.

The V-Class is positioned as a more spacious alternative to Mercedes-Benz’s conventional passenger vehicles, with a focus on rear-seat comfort and a seven-seat configuration suited to chauffeured transportation. Its price is in the similar position of Lexus LM.

The luxury van market has gained traction in Korea, as affluent consumers increasingly value interior space and passenger comfort. Unlike conventional minivans, premium models are often used not only as family vehicles, but also for business transportation and chauffeured services.

The Toyota Alphard van recorded 923 sales in Korea in 2024. Its sales also rose to 1,559 units last year, while 1,463 units were sold in the first nine months of this year, up 28.9 percent during the same period a year earlier, according to data from the carmaker.

Sales of the Lexus LM are also on track for a gradual rise. Lexus sold 312 LM units in 2024 and 573 units last year. In the first nine months of this year, 506 units were sold, up from 433 units during the same period a year earlier.

Mercedes-Benz’s decision to introduce the V-Class in a single configuration suggests the automaker sees sufficient demand in Korea to enter the segment without a broad lineup of variants.

The company’s entry could also pressure Toyota and Lexus to strengthen their offerings as competition moves beyond price and specifications toward interior design, passenger comfort and brand appeal.

With Mercedes-Benz now joining Toyota and Lexus, Korea’s luxury van market is likely to become more competitive, as automakers seek to capture a growing pool of customers willing to pay for an emerging type of premium in-vehicle experiences.

“The V-Class launch signals that premium vans are becoming an increasingly established part of Korea’s luxury vehicle market,” an auto industry official said.