It isn’t likely that a new U.S.-Korea trade agreement will lead to a surge in Korea sales of U.S. automakers because the market holds the perception that Korean brands have a functionality and style that can’t be matched by other brands. U.S. sales last year accounted for only 1.1% of the market. Typically, buyers don’t even consider imported models from General Motors Co., Chrysler Group and Ford Motor Co.
Consumers are looking for practical features, a high fuel efficiency rating, and a network of service centers. President Lee Myung Bak has signed the agreement, which will probably take effect on Jan. 1.
This deal calls for the phasing out of South Korea tariffs on U.S. vehicles. Kang Sang Min, a Hanwha Securities Co. analyst in Seoul, said that it is “highly unlikely” that U.S.-built cars will do well in the auto market in Korea. The local automakers such as Hyundai and Kia are believed to offer competent cars and services that are quick and convenient. [source: BusinessWeek]