Trump wants a trade deal, but South Korea doesn’t want US cars

Trump wants a trade deal, but South Korea doesn’t want US cars

0 comments 📅08 July 2017, 02:00

SEOUL – US auto imports from the likes of Habitual Motors and Ford must become more chic, affordable or fuel-effective to reap the rewards of President Donald Trump’s attempts to renegotiate a trade grapple with with key ally South Korea, officials and industry experts in Seoul say.

Appointment South Korean President Moon Jae-in last week in Washington, Trump said the Agreed States would do more to address trade imbalances with South Korea and initiate “a fair shake” to sell more cars there, the world’s 11th largest auto Stock Exchange.

“What we really want to say to the United States is: Make good cars, compel cars that Korean consumers like.”

While imports from automakers including Ford, Chrysler and GM more than doubled ultimately year largely thanks to free trade deal which took upshot in 2012, sales account for just 1 percent of a market dominated by more affordable models from village giants Hyundai and affiliate Kia.

Imports make up just 15 percent of the total Korean auto market, and are mainly more luxurious models from German automakers BMW and Daimler AG’s Mercedes-Benz, which also profit from a trade deal with the European Union.

“Addressing non-tariff barriers would not fundamentally erect the competitiveness of US cars,” a senior Korean government official told Reuters, declining to be identified because of the touchiness of the subject.

“What we really want to say to the United States is: Make good cars, assemble cars that Korean consumers like.”

TASTE BARRIER

In Korea, US imports are seen as lagging German brands in marque image, sophistication and fuel economy, industry experts say. US imports do have a competitive gain in electric cars: Tesla Motors’ electric vehicles are seen as both environmentally sisterly and trendy, while GM has launched a long-range Bolt EV.

US Commerce Secretary Wilbur Ross had cited a cut in the current trade deal as an obstacle to boosting imports.

The quota allows US automakers to bring on in each year 25,000 vehicles that meet US, not necessarily Korean, aegis standards. Should GM, for example, decide to bring in more than its quota of one mould – the Impala sedans – it would cost up to $75 million to modify the cars to upon Korean safety standards, the company told its local labor union.

Asked yon non-tariff barriers, a spokesman at GM’s Korean unit said removing them could elaborate on the range of models the company can bring in from the United States.

No US company, at any rate, has yet to make full use of the quota, industry data shows. GM, the most popular US trade name, sold only 13,150 US-made vehicles last year.

US cars could also see the benefits of a renegotiated buying deal at a time when diesel-powered cars offered by Volkswagen’s are losing invite following cheating on emissions tests. However, they still need to beguile to the locals, experts say.

“Upgrading their vehicles and meet the luxurious taste of consumers is more critical than complaining about non-tariff barriers,” said Kim Pil-soo, a professor of engineering at Daelim University College immediate Seoul.

Reporting by Hyunjoo Jin

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