Korea-US FTA boosts US car sales in KoreaMadeinkoreablog
[THE INVESTOR] US carmakers’ sales in Korea overtook that of Japan for the first time in 2015, industry data showed on June 20. The change is thought to have been brought on by the Korea-US free trade agreement implemented in 2012.
Following the FTA, the tariff on US-built vehicles was initially cut from 8 percent to 4 percent. From this year, the tariff has been completely removed.
According to Korean and Japanese automobile importers’ associations, US marques’ Korean sales came in at a record high of 17,501 units in 2015. Japan’s figure for the same year came in at 14,623 units.
The trend is continuing this year with January-May sales of US cars in Korea coming in at 7,140 units while the figure for Japan was 5,224 units.
Since the pact was implemented, US carmakers’ Korean sales have risen at a much faster rate here than in Japan.
Between 2011 and 2015, sales of US cars in Korea has more than doubled from 8,252 units to 17,501 units. In comparison, US carmakers’ sales in Japan increased about 28 percent over the same period.
With the Japanese automobile market dwarfing that of Korea, industry officials say that the FTA is likely to be the main reason behind US carmakers’ performance in recent years.
Korea’s automobile market saw record sales of about 1.82 million units in 2015, while Japan’s market recorded a year-on-year drop of about 9.3 percent to come in at 5.04 million units.