Korea has become a haven for imported cars, which make up approximately 20 percent of the local car industry in terms of sales.
Once a rarity, it’s now easy to spot cars of a wide assortment of foreign brands, ranging from the more accessible BMW, Mercedes-Benz and Audi to the super-posh Porsches and Jaguars.
But perhaps due to the extreme luxury they stand for, imported cars have also been a target for heavy criticism, mostly involving their prices ― most imported brands are pricier in Korea than in their homelands, which is the reverse of local car brands that sell at lower prices abroad ― and they demand high maintenance costs that far exceed those for maintaining a local brand.
The Fair Trade Commission has decided to address these matters once and for all by recently launching a quiet but menacing investigation into top imported cars.
Silent determination could be sensed from the clipped “we’ll do our best” from the officials in charge of the probe who declined to say more on the pending case.
While the agency has conducted investigations in the past, such a sweeping probe was unprecedented.
They will look into how auto parts for imported cars cost many times those of local brands, and allegations that the carmakers have formed a cartel on the interest rates they charge for monthly installments.
However, that may not be all.
Koreans are known to be quite emotional, and in this country, there is another set of laws called the “emotion law.”
It basically means that social codes of conduct are frequently decided by the emotions or spirit of the times.
And right now, regardless of whether or not President Park Geun-hye will stick to her guns, economic democratization is the key phrase.
Creating a legal basis where everyone has an equal shot at prosperity is the ultimate goal of this initiative, but it also is a reflection of the growing resentment toward the upper class, which unlike in many other advanced countries, refuses to practice noblesse oblige.
For the majority of the Korean public who cannot afford imported cars, the vehicles are a painful symbol of what they cannot get. But not only are they inaccessible, they also appear to be playing tricks on the consumers with exaggerated parts prices.
What’s more, many of the imported cars that bragged of their high-flying sales in Korea last year are expected to post deficits, which can only mean one thing: the profit is being soaked up by the headquarters.
As the outspoken head of a smaller imported brand recently claimed, the Korean offices may be being used as a cash cow for the carmakers’ global operations.
In their defense, foreign brand cars here try to take part in social contributions and in general pursue what they think they should do to prove they are worthy stakeholders in Korea.
But their headquarters may have other thoughts, which may explain the widespread recognition here that foreign brands are still far too unwilling to accept the local customs and perceive Koreans as truly valued customers.
The commission’s investigation, along with being a part of the economic democratization drive, may thus serve another purpose: as a wake up for the car makers’ out-of-the-country headquarters to realize their idea of localization is meaningless if it doesn’t correspond with what Korean consumers want.
By Kim Ji-hyun (
jemmie@heraldcorp.com)
