Chinese carmakers are launching aggressive marketing campaigns in Korea, offering rock-bottom prices and radical incentives to lure customers.
In February, importer China-Korea Motor started selling BAIC Motor's flagship SUV Kenbo 600, the first Chinese passenger car on sale here.
The Kenbo 600 is a mid-sized SUV that competes with Hyundai's popular Santa Fe, though in terms of performance, it has a 1.5-liter, 147 horsepower engine more usually equated with compact SUVs. But the Kenbo 600 boasts a fuel efficiency of 9.7 km per liter, as well as cruise control and various sensors that warn the driver of possible accidents. Its sleek design has also drawn many Koreans to showrooms.
At W19.9 million for the base models, it is between W2 million and W6.5 million cheaper than a compact Korean SUV (US$1=W1,122).
China-Korea Motor sold the entire initial batch of 120 in just two weeks after its release and brought in another 180, which also sold like hot cakes. An additional 200 are slated to be imported next month.
A China-Korea Motor staffer said, "We are offering to exchange problematic cars with a brand new one and plan to introduce a small Chinese SUV in the second half of this year."
Earlier this month, DFSK, a subsidiary of China's Dongfeng Motor, launched a two-seater van and 0.9-ton truck in Korea, while BYD, the world’s largest electric car manufacturer, set up a local subsidiary here last year and plans to begin sales this year.
Industry insiders say while sales have been minimal so far but are expected to grow rapidly as Chinese cars get more sophisticated. The Korea Institute for Industrial Economics and Trade said the level of technology of Chinese automakers now stands at 80 percent of their Korean rivals' but is expected to rise to 95 percent five years from now.
Kim Pil-soo at Daelim University said, "If Chinese carmakers, armed with competitive price tags, catch up in technology and bolster global marketing, we will see major changes in the domestic market as well."
A Kenbo 600 on a street in Gwanghwamun, Seoul last week.