Chinese EV makers gain traction in South Korea’s import car market despite uphill battle

This article was first published by The Korea Times in a partnership with the South China Morning Post. When Choi, a 35-year-old office worker in South Korea, started looking for her next car, she did not expect Chinese electric vehicle (EV) brand BYD to make her shortlist. “I’ve wanted an electric vehicle, but domestic models are just too expensive,” Choi said, adding that rising fuel prices first sparked her interest in EVs. Her attention turned to Chinese brands after reading about China’s rapid adoption of EVs and how it helped cushion the country from recent oil-price shocks linked to the conflict in the Middle East. “I still have some biases against Chinese products, but with so many people driving them in China, I figured they can’t just be cheap junk,” she said. “They’ve probably spent years developing the technology and gone through plenty of trial and error.” Choi’s case reflects a shift under way as Chinese EV makers step up their presence and gain traction in Korea, one of the world’s most competitive automotive markets. Chinese-made vehicles overtook Japanese brands in Korea’s import market for the first time in April, according to data from the Korea Automobile Importers and Distributors Association. Chinese vehicles accounted for 2,023 new registrations during the month, slightly ahead of Japan’s 1,974 giving China a 6 per cent share of the import market. That was driven largely by BYD, whose April registrations alone exceeded the combined sales of major Japanese brands including Toyota, Lexus and Honda. BYD ranked as the country’s fourth-best-selling import brand for a second consecutive month, data showed. Meanwhile, Chinese carmakers are accelerating their local expansion. Zeekr, the premium EV brand under Geely Group, recently entered the market and received more than 500 pre-orders within six days of launching reservations for its first model, the Zeekr 7X SUV. While Chinese brands had not yet posed an immediate threat to South Korea’s domestic carmakers, they were gradually reshaping the import car landscape, according to industry observers. “The momentum behind Chinese auto exports has been very strong in recent years,” said Feng Xiao, head of China industrials research at Citic CLSA. He attributed the trend to growing global EV adoption, rising fuel costs and Chinese carmakers’ efforts to localise production overseas through factories, research centres and supply chains. While Europe, Latin America and Southeast Asia remained the primary overseas targets for Chinese carmakers, Feng said South Korea occupied a different position in their global strategy. “South Korea is not a top target from a volume perspective,” he said. “But it is a symbolic market. If Chinese brands can establish themselves in a country with a strong domestic auto industry, it helps prove the quality and competitiveness of their products.” According to Feng, Chinese EV makers are increasingly competing on technology rather than price alone. He said features such as intelligent driving assistance, digital cockpits and battery technology had helped Chinese brands attract consumers seeking alternatives to traditional internal-combustion vehicles. “Chinese EVs overseas are not necessarily cheap,” he said. “In many markets, they are priced close to entry-level premium vehicles. What attracts buyers is more the driving experience and technology.” That focus on technology was also resonating with some Korean consumers, according to KJ Hwang, head of Korean industrial and automotive research at BofA Global Research. Hwang said Chinese EV makers were increasingly competing with Tesla rather than traditional carmakers in the minds of consumers, particularly among buyers looking for advanced software and smart driving features. “Korean consumers are willing to pay for a better experience,” he said. “It’s not necessarily about paying less.” He added that South Korea’s dense urban environment and long commuting times made technologies such as advanced driver-assistance systems and connected-car functions especially attractive. Perceptions of Chinese technology had evolved in recent years, as more Koreans became aware of China’s advances in areas such as artificial intelligence, robotics and smart vehicles, he added. However, analysts said building a sustainable presence in South Korea would require more than product competitiveness. Choi, the prospective BYD buyer, said a lack of nearby service centres remained her biggest concern, as the nearest facility was more than two hours away by car from her home outside Seoul. Feng said after-sales service networks, dealer coverage and used-car residual values would be critical factors determining whether Chinese carmakers could establish a long-term presence in mature overseas markets. “The next question is whether their service capabilities can keep up as vehicle ownership grows,” he said. Hwang shared a similar view, saying service infrastructure remained one of the biggest barriers to wider adoption. BYD said it viewed Korea as a “strategically important market”, adding that it planned to expand its network to 35 showrooms and 26 service centres by the end of this year. Meanwhile, Zeekr said it aimed to expand its offline network to 14 locations and establish 11 service centres nationwide this year. Hwang at BofA estimated that Chinese carmakers could capture 10 to 15 per cent of South Korea’s EV market by 2030 under a base-case scenario, with market share potentially reaching 20 per cent in a more optimistic case.

Chinese EV makers gain traction in South Korea’s import car market despite uphill battle

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}While not a high-volume market, success in South Korea helps ‘prove the quality and competitiveness’ of Chinese EVs, analyst says

While not a high-volume market, success in South Korea helps ‘prove the quality and competitiveness’ of Chinese EVs, analyst says