Honda Motor Co. will begin selling four vehicles in Korea this year, becoming the second Japanese automaker to try to crack the market dominated by Hyundai Motor Co.
Honda has scheduled a press conference for Tuesday, March 25, in Seoul to outline its plans, but an executive speaking not for attribution says the company will launch with the Accord and Civic sedans, the
CR-V small SUV and the Odyssey minivan.
Honda has set an initial sales target of about 3,000 annually through three or four dealerships, he says. Toyota sold 2,900 cars in Korea in 2002, its first year in the market.
"We think the models we will introduce already are relatively well known to South Koreans, particularly those who have been in the U.S.," the executive says.
Honda is a major market force in the U.S. market and, almost overnight, has become one in China, but it faces a tough challenge in Korea. Although Hyundai, Kia Motors Corp. and Daewoo Motor Co. have built Japanese vehicles under license in Korea for years and sold them under their own badges, the sale of Japanese-brand vehicles was banned by law until 1999.
Although that ban has been lifted, it effectively blurred Japanese brand identities for a generation of Koreans.
Honda also will have to overcome Koreans' steadfast resistance to imported vehicles in general. Sales of foreign vehicles in Korea last year jumped 108 percent to 16,119 units, but they still accounted for less than 1 percent of the total market.
Nearly one-third - 5,101 - were BMWs. Shigeharu Kimishima, an analyst for Mitsubishi Securities Co. in Tokyo, says Honda's strong brand image in the U.S. market especially should help it compete in Korea.
"They could prove to be a strong rival for the local automakers," he says.
But an analyst in Seoul says Honda is more likely to take sales away from other imports in Korea, not the locals, because of price considerations.
"Koreans generally think Japanese cars are good," says Sohn Jong Won, who follows the industry for Goodmorning Securities Co. "But foreign carmakers should be nervous, not the Koreans."