South Korea's iconic carmaker, Hyundai Motors, took its first step into the North American car market in 1986 with "Excel", an affordable and sturdy cost-effective compact car.
Hyundai started off its first year by shipping about 170,000 cars and four years later, over one million cars were sold, surprising the world's car industry. Now, Hyundai represents Korea Inc. as the world's fifth-largest carmaker.
On its home turf, the auto group has successfully fended off an attack from powerful foreign brands, but its dominance is now being challenged by a Chinese company which is nothing to sneeze at due to its smart and bold strategy to steal attention from consumers.
BAIC Yinxiang Automobile, a joint venture between the Beijing Auto (BAIC) and the Yinxiang Motorcycle, has adopted Hyundai's old strategy to use South Korea as a footstone for its way out to the global car market.
The first inning went to China-Korea Motor Co. (CKM), a local importer, which launched Beijing Auto's sport utility vehicle (SUV) "KENBO 600", the first Chinese passenger car sold in South Korea.
"Prices of cars sold in South Korea are way too expensive," CKM head Lee Kang-soo told Aju News. "I wish KENBO 600 raise the carmakers' attention on how expensive their cars are. They should make a great effort on lowering the prices."
The price of KENBO 600's "Modern" Trim was set at 19.99 million won (17,446 US dollars), cheaper than that of the lowest trim of Kia's popular compact-sized SUV "Sportage" priced at 22.2 million won
The importer sees KENBO 600's price and reasonably good quality as a sweetener to lure South Korean consumers. "Popular compact cars such as Chevrolet's Spark and Kia's Morning are priced around 17 million won. Just by adding three million won, consumers could get KENBO 600, a mid-sized SUV," said Lee.
"This is a great advantage. KENBO is cheaper than competitors and also safe. It received a five-star grade in China's national New Car Assessment Program (C-NCAP)."
Lee targets a niche market of cash-strapped consumers who are in need of a decent car just like Hyundai did in North America three decades ago. In South Korea, owning a car is thought to be an essential part of the social life and status of self-conscious young people, and the importer had it spot-on.
The importer has sold out the first batch of 120 KENBOs in less than a month and plans o bring in another 200 more in March, despite consumers' doubt on quality and safety. A favorable consumer reaction will lead to imports of different models, including a compact SUV that competes with SsangYong Motor's "Tivoli", Lee said.
Tivoli is the best-selling model in its segment, because of its reasonable price and performance. The model helped SsangYong post its first profit in nine years in the fourth quarter of last year.
BAIC isn't the only carmaker which is trying to use South Korea as a test bed. American electric vehicle (EV) maker Tesla and China's largest EV maker BYD are eyeing on South Korea's free-for-all EV market.
BYD registered its corporate name to set up a sales branch and formed a network of infrastructures with South Korean partners, while Tesla is expected to begin sales at the end of May.
Park Sae-jin = firstname.lastname@example.org