automobile sector has refuted claims by some European car industry leaders that
Korean carmakers are enjoying huge benefits under the Korea-EU Free Trade
On the contrary,
a greater beneficiary of the bilateral FTA ― which took effect on July 1, 2011
― is the European counterpart, the Korea Automobile Manufacturers Association
that the trade pact offers little benefit in terms of tariff elimination to the
automobile sector, highlighting the manufacturing factories in Europe.
“The majority of
Korean car sales in the EU are those produced within the EU (Czech Republic
and Slovakia) or non-EU
countries (India and Turkey),” the KAMA
said in a statement.
executive said it is estimated that vehicles of Hyundai Motor and Kia Motors
exported to European countries accounted for “only 20 percent” or so of their total
sales in the EU in 2011.
percent of new car sales were those produced in the EU or imported from Turkey and India,” he said.
KAMA cited the
recent situation that import car sales are enjoying a robust growth in Korea
while the Korean car market dwindles due to the economic slowdown and sluggish
the new registration of European cars swelled 16.4 percent from July 2011 until
March 2012 in Korea, running the first in the import car sales, topping
Japanese and US products,” it said.
have enjoyed high profits in Korea.
In 2011, BMW, Benz and Audi posted US$3.4 billion in sales revenue and recorded
$87 million in net income, which is a 6.4 percent growth over a year before.
captured 6.1 percent of the Korean market in 2011 and 6.5 percent during the
first quarter,” KAMA said, citing data.
It compared the
figures with the market share of Korean car makers ― represented by Hyundai and
Kia ― that posted 5.1 percent in 2011 and 5.7 percent in the first quarter in
the European market.
KAMA also stressed that between
July 2011 and March 2012, a total 335,320 vehicles were exported to the EU by
the Korean auto makers, of which 48.5 percent or 162,624 units were exported by
“GM Korea and Renault Samsung Motors, the affiliates of respective US and EU
It said the
effect of Korea-EU FTA has generally been “overstated” as a substantial cause
export increase to the EU.
Korea-EU FTA effectuation, the EU’s 10 percent tariffs on the imported Korean
cars reduced by only 1.7 percentage points for cars with engine capacity below
1,500cc and 3 percentage points for those over 1,500cc.
tariff reduction will pull down retail prices, leading to a sales increase, it
is too much to say that such a minor reduction of tariffs would have meaningful
effects on exports, it said.
“It seems more
reasonable that the back-to-back introduction of new models and improved
customer recognition can explain the increase of exports.” (nvn)