In the imported automobile market, it is customary practice to dramatically decrease car prices at the end of the year to clear inventory before the new model year begins. However, things are different this year. BMW and Mercedes-Benz, which typically compete for the top ranks in South Korean imported automobile sales, are giving extraordinary discounts of more than 20%, even in May. Other foreign automobile manufacturers are giving significant reductions, notably on electric vehicles.
The unique cheap competitiveness is the result of a decline in the imported automobile market. According to industry sources, a number of negative variables have come together this year, producing a pervasive feeling of panic that year-end reductions would not be enough to clear inventories. High loan rates and inflation have significantly impacted consumer mood, resulting in the sale of 76,143 imported passenger automobiles from January to April this year, a 7.8% decline from the same period the previous year. This is the lowest result since 2019 when 70,380 were sold. The temporary stall (the “Chasm” effect) in demand for electric vehicles has had a particularly negative impact on the high-end imported automobile industry. The legislation mandating green license plates for corporate cars valued over 80 million won also decreased sales. According to statistics supplied by the Ministry of Land, Infrastructure, and Transport to Democratic Party member Kim Ju-young, registrations of imported business automobiles valued above 80 million won in the first quarter of this year (8,168 units) fell by 23.8% compared to the same period last year. In comparison, domestic business automobile registrations in the same price group (2,700 units) fell just 10.4%.
As of May. 22. the vehicle-buying information site Getcha stated that 23 foreign car models are available at discounts of more than 20% this month. In May of last year, just one model, the Audi A6, was reduced by more than 20%, at 24.5%. The number of models reduced by 10% to 20% has also climbed, from 306 in May of last year to 354 this month.
Although certain automakers routinely give discounts, BMW and Mercedes-Benz, normally the top sellers, seldom provide such large reductions outside the year-end season. For example, the Mercedes-Maybach S-Class (680 4MATIC) starts at 375 million won and is being sold at a 25% discount, the greatest reduction of any model. The highest-end Mercedes-Benz S-Class (580e 4MATIC) is likewise reduced by 16.9%. BMW’s mid-sized SUV X3M (Competition model) is on sale for a 22.7% discount. While the advent of the 2024 model year has affected this, the discount rate remains very high.
