Ssangyong Motor Co., Korea's fourth-largest carmaker, has snatched the lead from its far bigger rival Hyundai Motor Co. in the domestic luxury car market, as its New Chairman sedan beat Hyundai's Equus in the January-July sales.
According to industry sources, the New Chairman topped the luxury car sales with 8,434 sold in the first seven months this year. The Equus, the top-selling luxury model last year, dropped to second place with 7,856 sold during the same period.
Ssangyong introduced the Chairman sedan in 1997 using designs and technology provided by Germany's Mercedes-Benz. The carmaker attributed the its new-found popularity to the introduction of the New Chairman in last September.
"The New Chairman was the fully redesigned model and its new features quickly attracted many customers. We tried to offer quality aftersale services to our customers and the efforts helped the model continue on the trend of solid sales," said a Ssangyong spokesman.
New Chairman sales rose more than five-fold from 299 units last September to 1,726 one month later, defeating Hyundai's Equus, then the top-selling luxury model. It was the first time that Ssangyong outperformed the far larger rival in the high-end segment.
But some analysts have given a rather cautious reaction to the Chairman's success.
"Hyundai has concentrated on SUVs and midsize sedans so far. Ssangyong indeed found a good niche market in the luxury segment and cleverly used the new model to boost sales. The carmaker should enjoy the No. 1 position for the time being. But afterward, it will remains to be seen," said Park Sung-jin, auto analyst at Woori Securities.
Many experts say the competition is heating up in the nation's luxury car market. Hyundai Motor plans to launch a luxury model in 2007, mimicking Toyoda's Lexus and Nissan's Infiniti. "The new brand will feature sedans similar to BMW's 5 series," said Kim Dong-jin, Hyundai vice president.
GM Daewoo Auto & Technology Co., Korea's third-largest carmaker, plans to introduce a luxury sedan early next year. Renault Samsung Motor Co, the smallest carmaker here, said it will add a large SM7 model to its product lineup the same year.
Imported autos, which mostly focus on the top-end market, are also expanding their share here. According to industry sources, foreign car sales in July rose 34 percent on-year to 2,244 units. Experts estimate that imports now account for about 20 percent of the larger than 2 litre engine capacities here.
In particular, BMW and Lexus, the two most popular import marques here, are steadily gaining on the domestics. BMW sold 3,133 vehicles in the first seven months this year, compared with 6,219 Opirus sedans sold by Kia. But the considerable price difference could keep the sales gap for some time. For example, a 3-litre BMW 530i sells for 86.9 million won, more than double the price of the Opirus GH300 with the same engine size.
"The nation's auto market is already saturated. But new carmakers have continued to enter the up-market segment. Although the luxury cars have better profitability than compacts, beating the stiff competition here will not be easy," said Park.
According to industry sources, 69,207 luxury cars were sold here in the first seven months, accounting for about 13 percent of local sales during the period.
In the first half of this year, Ssangyong generated 1.68 trillion won in sales and a 41 billion won net profit. The carmaker mainly produces sport utility vehicles such as the Korando and Rexton and has about a 10 percent share of the local auto market.
- Source from Korea Herald (Aug 15, 2004) -
By Kim Tae-gyun