From Hero to Zero: Audi’s Harsh Fall in the Korean Car Market

According to the Korea Automobile Importers and Distributors Association (KAIDA), BMW led the January brand registrations with 4,330 vehicles, followed by Mercedes-Benz with 2,931 cars, showing a significant gap of about 1,400.

An industry insider pointed out that Mercedes-Benz’s leading model, the E-Class, is in the process of changing generations, which has led to supply issues despite demand.

Looking further down the rankings, Lexus took third place with 998 units, followed by Volvo with 965, and Toyota with 786 new registrations. Porsche narrowly took sixth place with 677 units, followed by Mini with 543, Land Rover with 340, Lincoln with 285, and Ford with 229 registrations.

According to the association, the total number of new registrations was 13,083, a significant decrease of 19.4% compared to the previous year.

Meanwhile, due to unclear regulations on government subsidies for electric vehicle purchases, Tesla saw the unfortunate result of only one new registration in January.

The association emphasized that European cars, including BMW and Mercedes-Benz, sold 11,164 units, 77.7% of the total sales. Japan followed with a respectable 15% market share, selling 1,961 units. The United States, which includes Ford and Tesla, sold 958 units, capturing a 7.3% market share.

Of the 13,083 vehicles sold in January, 62.7% or 8,207 units were purchased by individuals, while corporations bought 4,876 units, accounting for 37.3% of total sales. Some predict that corporate vehicle purchases will decrease even further following the introduction of corporate license plate registration.

Individual purchases were highest in the Gyeonggi region, with 2,551 units sold, accounting for 31.1% of sales. Seoul followed with 1,764 units, and Incheon with 479.

Regarding corporate purchases, Incheon led with 1,425 units, accounting for 29.2% of total sales. Busan was a close second with 1,418 units, just 0.1% behind Incheon, and Gyeongnam came in third with 811 units.

The most popular single model sold nationwide in January was the BMW 520 with 598 units, the Mercedes E300 4Matic with 558 units, and the Lexus ES300h with 556 units.

Meanwhile, Audi, once part of the so-called German Big Three, has fallen from grace.

According to an audit report released by Volkswagen Group Korea on the 11th of last year (2023), they recorded sales of approximately $1.62 billion and an operating profit of $19.2 million, which are respectable figures.

However, these figures represent a drastic decrease of 14.7% and 21.9%, respectively, compared to 2022. An Audi official explained, “A significant portion, between 60-70%, of the strong performance of brands under Volkswagen Group Korea is attributed to Audi, whose sales last year decreased by 17.1% to $947 million, which was a decisive factor.”

This year, we also saw a significant decrease in sales. According to KAIDA, Audi’s sales in the first quarter of this year plummeted by a massive 84.1% compared to last year, selling only 1,100 units and dropping to 10th place in the rankings.

Last year, Audi just managed to hold onto its third-place position in annual sales for the fourth consecutive year, but it is increasingly being overlooked in the market.

According to the association, Audi’s market share in the first quarter was a mere 2.0%, the lowest since the dieselgate scandal in 2017 when it recorded 0.4%.

This is despite Audi recording a respectable 1.9 million units sold globally last year, an increase of 18.0% from the previous year. Still, it has been unable to make any headway in the domestic market.

Some point to the lack of new models as the main reason for Audi’s decline.

The A6, which accounted for nearly half of Audi’s sales last year at 44.2%, has not seen a new model since its complete overhaul in 2019, almost five years ago.

With Mercedes-Benz releasing a new E-Class in January and BMW launching a new 5 Series last November, Audi has lost its demand.

Audi’s long-term policy of offering aggressive discounts of 10-20% on specific models has also negatively impacted its image. There is an established perception that buying an Audi at a total price is a disadvantage.

Additionally, with only 38 service centers, half the number of BMW’s 80 and Mercedes’ 76, there are dominant opinions that Audi’s service is inconvenient.