Posted by: Ihlwan Moon on August 5, 2008
Lofty oil prices must have created a tough environment for all automakers. Yet Honda is beating its own sales target in Korea where it is now the No. 1 import brand. Its sales jumped 95% in the first seven months of this year by selling 8,056 vehicles. Sure the sales number doesn’t look that big but it represents a market share of 20% among foreign brands in a country that, not long ago, was the least-hospitable market on the planet for auto imports.
Indeed, Honda’s seven-month sales account for 90% of its original sales target for all of this year. Pleasantly surprised by the unexpected surge, Honda has upwardly adjusted its 2008 target to 12,000 vehicles from an earlier 9,000. Also, it is not the gas-sipping Civic or a hybrid that’s driving Honda’s growth. The best selling model is the Accord powered by 3.5-liter V6 engine that accounted for nearly 40% of all its deliveries in Korea this year.
Honda is also spearheading a change in Korea’s imported car market, where most of the action used to take place at the top segment. Luxury German brands and the Lexus were the most popular import cars until last year but now, No. 2 BMW’s share of just below 14% is more than six percentage points smaller than Honda’s. Mercedes Benz is third placed with 11.5% and Lexus fourth with 9.7%. Overall sales of imported vehicles jumped 33.7% in the seven months to 39,911, representing just over 6% of total vehicle demands in Korea. Only two years ago, imports accounted for only 3% of auto sales in Korea.