Hoovey689

iTrader: (16)

Why BMWs are cheaper than Hyundais in Korea

Gallery:
http://www.autoblog.com/photos/2014-...#photo-5772109

Bloomberg reports shifting tariff regulations have upended the traditional automotive pecking order in Korea. Thanks to cheaper import taxes, foreign brands have seen market share jump from 28 percent to 41 percent over the last two years. BMW, Mercedes-Benz and Audi have all capitalized on the shift, with domestics like Hyundai and Kia suffering at the hands of their German rivals.

Taxes on European imports have fallen from 8 percent in 2011 to just 3.2 percent today. Over the next few years, tariffs will all but be eliminated for most imports, and taxes on US-made vehicles are expected to fall to just 4 percent in 2014. By 2016, that number will be zero. Needless to say, Hyundai and Kia are concerned about the shift.

Hyundai has seen profit fall by 15 percent last quarter, and the company says it is on pace to see the slowest sales growth since 2007. The company's shares have fallen by 12 percent. In order to stem the losses, Hyundai has discounted its midsize sedans and started working on diesel engine options.

http://www.autoblog.com/2013/05/18/w...dais-in-korea/

bitkahuna

iTrader: (20)

competition works. glad to see s. korea getting fairer, finally.

LexFather

Since I'm seriously shopping for a non-Lexus I am stunned at how good the BMW lease deals are here. I always talked about them but they make a very compelling argument especially with included maintenance.

SteVTEC

Yes indeed they are.

Och

iTrader: (3)

BMW lease rates seen good if you opt for base models. Once you start adding essential options, these rates are no longer so attractive.

I only leased a vehicle once, and I probably won't do it again. I prefer to purchase.

Harbinger

And this is how it should be. It is absurd for any government to protect an inferior product just because it is a domestic product. Kia, Chrysler and Mitsubishi should all have been dead long ago, with Hyundai and GM seeing the reaper in their rearview. Fair competition fosters better products, stronger companies and better choices for the consumer.

mordecai

LOL Autoblog tries to prop up Hyundai/Kia again.

Maybe the 1 or 3 series is cheaper than the Equus in Korea. I doubt the tariffs will make the average price of BMWs below that of Hyundai.

I8ABMR

I have noticed the same thing. I am wondering when Lexus will start doing free maintenance on their cars for 2 years. They are already doing it at Toyota. They need to step it up

mmarshall

No. I have to disagree. I'm certainly not a fan of Government money being wasted or spent unncessarily (and I saw plenty of that in my 33-year Federal career). But, IMO, the money spent and and corporate restructuring done on both GM and Chrysler was more than worth it. For one thing, over and above the obvious benefit of preventing massive bankrupcues, it has given us vastly improved new vehicles from both corporations. And UAW workers, because of the intense competition from lower-paid workers worldwide, now have a reduced pay/benefit package that is more consistant with the economic reality of the times. Now, I'm not against workers making a good living.....hard work, IMO, deserves good pay. But despite repetitive-motion injuries, when people on the assembly lines were getting 30 or 40 dollars an hour just to bolt-on tires/wheels or attach trim pieces all day long, that simply was unsustainable.

spwolf

yeah, AB is copying over some text without basic understanding of what it means... it means that there will be competitive pricing.

mmarshall

Bimmer lease-deals, as a rule, reflect the hype that those cars get in the auto press and their projected residual values, although that is more-so of the Bimmers of several years ago than today. The company, in the past, and, to a lesser-extent, today as well, can afford low monthly lease-payments without losing money simply because of the high residual vales these cars typically bring and the demand for them even as used-cars.

But, of course, it can also be a crap-shoot for the manufacturers, as Nissan found out several years ago when they lost a lot of money on lease-deals. They guessed too high on the projected residual value of their products, set the lease-rates accordingly, then got caught flat-footed when those used cars turned out to have a lower Kelly Blue-Book value than Nissan had first estimated. So, customers who leased Nissan products, at that time, got at least partly a free-ride....their lease-payments didn't cover the actual depreciation of those 2-4-year old cars.