Where did the many Japanese cars go… Japanese car market share fell to 1%

In the domestic automobile market, the share of Japanese cars fell to 1% last year. This means that out of 100 new cars sold in Korea, only one Japanese car. It was largely attributed to the boycott of Japanese products (No Japan) that struck in 2019, but experts analyzed that “the overall appeal of Japanese cars has fallen.” In addition, it is pointed out that “innovation and bold investment were lacking” inside Japan.

According to the sales performance of imported cars by the Korea Imported Automobile Association (KAIDA) and the Kaizu-U Data Research Institute on the 7th, five Japanese car brands (Lexus, Toyota, Honda, Nissan, Infiniti) sold more than 2,500 units in the Korean market last year. . It accounted for about 7.5% of imported cars (27~280,000 units) sold last year, and only 1.1% of the total domestic sales (1.89 million~1.9 million units).

It is the first time since 2001 when KAIDA’s performance was calculated that the proportion of Japanese brands among imported cars fell below 10%. Japanese cars that entered the Korean market with Lexus accounted for 35.5% of the imported car market in 2008. Since then, the proportion of imported brands has decreased as the number of imported brands increased, but after achieving the first sales of 30,000 units in 20016, it peaked at 45253 units the following year. In addition, despite No Japan in 2019, it sold 36661 units.

According to the Automobile Industry Association, domestic automobile sales in Korea last year recorded 1.9 million units, the highest ever despite the novel coronavirus infection (Corona 19). Hyundai-Kia’s sales increased 6.2% from 2019, and Mercedes-Benz maintained 70,000 units for the second consecutive year. In addition, BMW increased 32.1%, and Audi and Volkswagen, which significantly increased their volume after Diesel Gate, more than doubled from 2019. In the aftermath of Corona 19, major automakers continued to grow in the Korean market, but only Japanese cars took a step back.

In the automobile industry, the view that the sluggishness of Japanese cars is not only due to the no-Japan sentiment of Korean consumers triggered by the Korea-Japan trade dispute is predominant. Japanese cars are losing competitiveness in almost all sales conditions, such as design, convenience, and innovation that Korean consumers consider important when choosing a car.

“As the quality of domestic cars such as Genesis has improved, there is no reason to pay more and buy Lexus,” said Ko Tae-bong, head of the research center at Hi Investment & Securities. Said. Here,’Galapagos’ means that Japanese cars adopt designs that only resonate with domestic consumers.

It is also analyzed as a factor that the tendency to connect cars to social status has increased. Lee Eun-hee, professor of consumer science at Inha University, said, “For Korean consumers, tea is more than just a consumer product. In that sense, European cars, such as German luxury brands, are good cars to show off. On the other hand, Japanese cars were recognized as cars with good practicality. The car has lost its competitiveness,” he pointed out.

In fact, the domestic car that sold the most last year in Korea was the Grandeur (14,5463 units), and the imported car was Mercedes-Benz E-class (33,642 units). In particular, the E250 at a price of 63 million won sold 11,321 units last year, surpassing the total number of Lexus sales (6948 units).

The sluggishness of Japanese cars in the Korean market is also remarkable compared to Japanese consumer goods brands such as Uniqlo and Muji. Although FRL Korea, which owns UNIQLO, saw a sharp decline in sales since Noh Japan, it recorded more than 600 billion won (September 2019-August 2020) annually, with comparatively superior products such as’Heattech’.

In-ho Kim, Vice Chairman of Business Insight, said, “Japan’s fast retail, etc., based on innovation, puts functionality that rival brands cannot match. On the other hand, Japanese cars do not have such competitiveness.” “10 years ago, young people in Japan thought,’I don’t need a car anymore.’ That’s why automakers also made less effort to innovate and develop.” “Recently, Tesla and Hyundai Motor Company Being pushed against it proves this,” he added.

Voices of loss of momentum for innovation come from inside Japanese automakers. A Mitsubishi executive, who is withdrawing from the European market this year, said in a recent interview with a foreign press that “there was not enough sales backed up to drive innovation.”

The presence of Japanese cars in the used car market has also declined. According to Enka.com, Lexus’s popular model ES for sale last year was 3497 units, up 15.3% from 2019 (3032 units). In addition, sales of Toyota Prius (1314 units) and Camry (1659 units) last year increased by 5% and 6.6% respectively from 2019. An official of Enka.com said, “Overall, it seems that the position of Japanese cars has decreased, and sales have increased.”

There is also interesting data indicating the rise and fall of Japanese cars in the Korean market. As the number of Korean travelers to Japan increased, consumption of Japanese tea also exploded. The number of Koreans visiting Japan last year, when Japanese cars recorded the lowest market share, was around 500,000 (estimated), which is about a tenth of the previous year. In 2006, when more than 10,000 Japanese cars were sold in Korea, the number of Korean tourists visiting Japan exceeded 2 million. In addition, in 2016, when the number of tourists visiting Japan exceeded 5 million, sales of Japanese cars recorded more than 30,000 units, and in 2018, the highest sales in history, the number of tourists visiting Japan peaked at 7.53 million units.

In addition to the decline in the competitiveness of Japanese cars, it is the view that the sharp decline in’Japanese familiarity’ affected car sales. Lee Yeon-taek, a professor at Hanyang University’s Department of Tourism, said, “As exchanges between Korea and Japan have become distant, environmental factors other than supply and demand have affected product demand.” In the future, he said, “tourism exchange reflecting familiarity can be a prerequisite.” If exchanges between Korea and Japan increase, there is a possibility that demand for Japanese products such as Japanese tea will increase.

Reporter Kim Young-joo [email protected]