By Kyong-Ae Choi
While South Korea’s auto market is dominated by local players, particularly Hyundai Motor Group, Germany’s BMW has seen a healthy jump in its share of the imported passenger car market to 26% last year from 18% three years earlier.
BMW Group Korea attributes some of that surge to the effect of South Korea’s free-trade agreement with the European Union, which took effect last year and lowered tariffs on imports from the EU. BMW’s vehicle sales rose 19% to 11,032 units in the January-April period from a year earlier.
The German luxury car maker is hoping to replicate that success in the nascent electric car market with the introduction of two pure electric models – the i3 and the i8 – in 2014 following their global launch in 2013.
BMW will be entering the local electric car market around the same time as Hyundai, which plans to sell an Elantra-sized compact electric car from 2014. Kia Motors aims to introduce an electric version of its Ray mini car in 2013, depending on Korea’s progress in building charging stations for electric vehicles.
That’s the make-or-break issue for car makers looking to release all-electric cars in Korea. Only a small number of charging stations currently exist and are used for Hyundai and Kia electric vehicles used by the Korean government. The government has said it will build 150,000 charging stations across the country by 2016 to help boost sales of environment-friendly vehicles.
“The biggest hurdle is lack of the charging infrastructure for electric cars, so we will continue to ask the government to make charging stations ready as announced,” a BMW Korea spokesman told Korea Real Time.
Other local car makers are taking a wait-and-see stance. GM Korea will produce the electric version of Chevrolet Spark mini car next year for export to the U.S. but has no plans to sell it in the domestic market. Renault Samsung Motors will supply its Fluence Z.E. electric car early next year to government organizations but doesn’t plan to sell it car at dealerships for now.
Meanwhile, Japanese car makers, which have led the way in the development of all-electric vehicles, don’t have any plans to sell all-electric cars in Korea. Toyota recently developed an electric version of its popular RAV4 SUV in a joint project with Tesla in the U.S. and Nissan’s Leaf has been available in global markets such as Japan, the U.S. and Europe since 2011.
For BMW and local car makers looking to electric vehicles to provide a new growth driver, progress in Korea’s plan to rapidly increase charging stations to a level similar to Japan, particularly in urban areas, is crucial.
“Japan has a comparatively well-established charging infrastructure for electric cars and most of the emissions-free cars are used as commuter cars in cities,” a Nissan official said.