GM, Renault Samsung bolster imported car business

General Motors Korea and Renault Samsung Motors, both of which are categorized as Korean automakers, are expanding their imported car business on the back of the rising popularity of foreign car brands in all market segments.

Renault Samsung’s QM3, manufactured in Spain, and the recently-introduced Chevrolet Impala, produced in the United States and imported by GM Korea, are creating new success stories in the local mass vehicle market.

The two brands target a growing number of Korean drivers who want to ride an imported vehicle without the high price tag or burdensome maintenance costs.

“The QM3 and Impala are able to reap the advantages of being Korean cars, including lower maintenance and insurance expenses, while maintaining their identity as foreign-made vehicles,” said Kim Pil-su, an automotive engineering professor at Daelim University.

By definition, the QM3 and the Impala are vehicles manufactured outside of Korea. At the same time, these cars remain categorized as “Korean” since they are marketed and sold by carmakers with local production lines. Both Renault Samsung and GM Korea are members of the Korea Automobile Manufacturers Association.

“It’s an excellent deal for consumers. They get to drive a well-manufactured car made in global, developed markets, without having to worry about the high maintenance costs of imported cars,” Kim said.

Armed with alluring specs including high fuel efficiency and affordable pricing, the QM3 and Impala have been recording successful sales in Korea.

Following its introduction in December 2013, total sales of the QM3 reached 18,191 units last year, while an additional 12,549 units were sold from January to July this year, according to industry data.

The Chevrolet Impala, launched just last month, is also geared for a bright sales outlook with preorder volumes surpassing 3,000 units -- a record beyond GM Korea’s initial sales expectations.

Industry watchers say that timely sales strategies that take advantage of improved perceptions of foreign vehicles in Korea have driven forward the success of these vehicles with “mixed identities.”

Sales of imported cars have been recording a double-digit on-year growth for the first eight months of this year.

As the popularity of imported brands continues to increase, GM and Renault are expected to expand this unique production model in the years to come, bringing more diversity to the domestic car market, according to Kim.

“The local auto industry is set for fiercer competition in the coming years, as minor Korean automakers are expected to continue to roll out more cars like the QM3 and the Impala in a bid to offer customers a broader product range,” the auto expert said.

Meanwhile, while the rise of such “mixed identity” vehicles may reportedly help smaller Korean automakers drive up their sales in the near future, such production patterns in the long run may potentially weaken their standing in the market.

“Korean automakers have to manufacture their vehicles on home ground in order to retain their clout over the national economy,” Kim said. “If they shift their focus entirely onto imported models, such brands may become relegated to simply a car dealership status.”

By Sohn Ji-young (jys@heraldcorp.com)