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Foreign carmakers see opening in Korea

Local auto companies sidelined by supply chain disruptions
Feb 12,2020
The timing couldn’t be better for import automakers to launch new cars in Korea, as their local competitors struggle to keep their factories operating with the Wuhan coronavirus outbreak disrupting their supply chains.

Even though overall consumer sentiment might have weakened, foreign automakers are believing that having a strong start for the year will prove helpful, as they had a rather disappointing 2019 from the slow economy and lower overall car demand.

The industry had originally been hoping to set a new record last year, with a goal of selling 300,000 units after selling a record 260,705 units in 2018. But sales of imported cars fell 6.1 percent on year to 244,780 units in 2019.

Consumer demand for new cars is expected to remain low, as people are avoiding going outdoors to shop, but Audi Volkswagen Korea nevertheless pushed ahead with its original schedule to launch the third-generation Touareg last week.

While acknowledging that holding a physical event to introduce the new car included risks as the coronavirus continues to spread, a spokesperson for Audi Volkswagen Korea said it was well-prepared.

In introducing the large-size SUV, expected to compete against the Genesis GV80, the German automaker’s Korean unit had its employees wear masks and gloves while distributing masks and hand sanitizers to reporters at the launch event instead of canceling the event as a whole.

The GV80 was launched last month, but the production schedule has been delayed due to Hyundai Motor’s difficulty securing enough supplies of wiring harnesses from China.

The Korean carmaker resumed operations Tuesday at its Ulsan factory, which manufactures the GV80 and the Palisade SUV. It is expected that bringing the operating rate back to normal will take days, and the time table is heavily dependent on how the virus continues to spread in China.

At the same time, Jaguar Land Rover Korea launched the face-lifted Discovery Sport SUV, five years after its predecessor’s 2015 introduction.

More launch events are planned ahead for import automakers as they grab the opportunity to capture more of the limelight while domestic manufacturers are sidelined.

Mercedes-Benz Korea is scheduled to unveil the new A-Class sedan and the CLA coupe during a media event Wednesday in Seongsu-dong, eastern Seoul. BMW was the only import automaker that modified its timeline due to the virus, as its Korean unit postponed the launch of the upgraded 1 Series and 2 Series originally slated for next week.

Meanwhile, local automakers are expected to undergo a rough first quarter, with some of them continuing their struggles from last year.

As its supply of auto parts from China ran out, Renault Samsung Motors shut down its plant in Busan from Tuesday to Friday. The production halt is endangering the company’s original plan to introduce six new cars to the local market this year, starting with the new XM3 SUV.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]