VW Korea CEO hints at Passat TSI markdown

Volkswagen Korea, the local importer and distributor for the German carmaker, is likely to offer a huge price reduction for its latest Passat series, intent to expand sales here.

According to local sources, the carmaker has approved dealers to offer nearly 30 percent off the Passat TSI, expected to make its official debut here in mid-August. 

The retail price of the sedan is projected to be around 36 million won ($32,300), but the final price will drop to around 26 million won, bringing it into the price range of Hyundai’s compact sedan Avante. The Avante Diesel is priced at 23.8 million won here.

While declining to comment on industry rumors, the head of Volkswagen Korea said the price would be attractive and he wants to expand the volume of imported vehicles in the local market.

“Price is not the most important (factor). ... But the price has to be attractive,” said Stefan Krapp, head of Volkswagen Korea, at a media event in Seoul on Friday.

“We want to democratize the import car market (with Passat). Passat will be launched in mid-August. Price and details will be released then.”

Volkswagen Korea’s plan comes after the surprise announcement last week by its sister company Audi Korea, which is offering a roughly 40 percent markdown on its A3 low-emission diesel compact sedan.

Like Audi, Volkswagen’s plan appears to be made to comply with low-emission vehicle sales regulated under South Korean law, according to market insiders.

According to the law on improving air quality in the capital region revised in 2013, automakers that sell over 4,500 units per year are required to make up 9.5 percent of sales with pure electric vehicles, hybrid vehicles and low-emission vehicles. Those that do not comply are fined 5 million won.

The Passat TSI is Volkswagen Korea’s only model that has been authorized as a low-emissions vehicle.

After resuming sales in April, Volkswagen Korea became the third-largest importer here in June in terms of the number of vehicles sold.

The company sold around 550 units of the Passat GT and 1,500 units of the Tiguan in a month, Krapp said.

By Cho Chung-un and Kim Bo-gyung (christory@heraldcorp.com) (lisakim425@heraldcorp.com)