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From Lamborghini to Rolls-Royce: Koreans’ craze for supercars

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Models pose with the Lamborghini Huracán Tecnica sports car [AUTOMOBILI LAMBORGHINI]
Models pose with the Lamborghini Huracán Tecnica sports car [AUTOMOBILI LAMBORGHINI]

The country where Lamborghini sells more cars than on its home turf of Italy. Where Mercedes sells the most E-Class globally.

The answer to both — neither the United States nor China, but Korea.

Korea is in the midst of a luxury supercar craze despite the lingering economic downturn, with a few of the world’s prestigious auto brands breaking sales records every year.

Some cars quickly sell out — orders are even closed for two or three years — upon release.

An all-time high of 3,138 imported cars that cost more than 300 million won ($220,100) were sold in Korea last year, backed by record sales of Bentleys, Lamborghinis, Rolls-Royces and Maybachs.

That’s a more than 10-fold surge from 2018, when the yearly figure stood at 307, according to data from the Korea Automobile Importers & Distributors Association (Kaida).

Expanding the scope to cars that cost more than 100 million won, a total of 78,208 imports were sold in Korea in 2023, up 8.8 percent on year. This means one out of three imported cars had price tags surpassing that threshold.

Supercars in vogue — which brands and to what extent?

Surprisingly, they are selling evenly.

Rolls-Royce Motor Cars sold an all-time high of 276 units in Korea last year, up 18 percent on year. Korea for the first time beat Japan in terms of sales and became the No. 1 market in the Asia Pacific region for the London marque.

That’s a dramatic landscape shift, as the brand’s Korean sales in 2018 were less than half of Japan’s, which has an auto market nearly three times bigger.

“Korea’s incremental growth for Rolls-Royce is expected to last at least a decade,” Irene Nikkein, Rolls-Royce’s Asia-Pacific director, told the Korea JoongAng Daily. “The Korean market’s potential is unlimited.”

Bentley Motors sold 810 units in Korea, up 4.3 percent on year, making it the No. 1 market for Asia.

The British automaker last year opened a Bentley Cube showroom in Korea, the first in the world, where not only exhibits the latest Bentley cars but also offers various services exclusively for Bentley owners in Korea, such as a lounge that they can rent for a private party or programs to customize their own cars.

Irene Nikkein, director for the Asia-Pacific region at Rolls-Royce Motor Cars, poses for a photo beside the all-electric Spectre coupe in Gangnam District, southern Seoul, in June. [YONHAP]
Irene Nikkein, director for the Asia-Pacific region at Rolls-Royce Motor Cars, poses for a photo beside the all-electric Spectre coupe in Gangnam District, southern Seoul, in June. [YONHAP]

Automobili Lamborghini sold 431 vehicles in Korea last year, up 8 percent on year, even more than in its home country with 409 units. Korea is now Lamborghini’s 7th largest market, beating Canada, Australia and France.

“Korea is a market that leads the trend; it is now a ‘window of Asia’,” said Lamborghini Chairman Stephan Winkelmann during an interview with the Korea JoongAng Daily.

Mercedes-Maybach sold 2,596 cars in Korea, a record high and up 32 percent on year. Korea is the No. 2 market for Maybach after China, and has been selected as the first country in the world to have the luxury carmaker’s brand center, set to open later this year.

The popularity is more vivid when considering more accessible luxury brands.

Porsche’s total sales came in at 11,355 units last year, surpassing the 10,000 mark for the first time while climbing 26 percent on year.

BMW last year usurped Mercedes for the top spot for the first time in six years. The 5 Series contributed greatly to the achievement, with Korea the world’s top market for the model. The latest 5 Series even made its global debut here last October.

Korea is also the country where most Mercedes E-Class are sold across the globe.

Bentley Motors Chairman and CEO Adrian Hallmark speaks during a press conference celebrating the open of Bentley Cube in Gangnam District, southern Seoul, last year. [BENTLEY MOTORS]
Bentley Motors Chairman and CEO Adrian Hallmark speaks during a press conference celebrating the open of Bentley Cube in Gangnam District, southern Seoul, last year. [BENTLEY MOTORS]

So, where does the craze come from?
Scarcity is the most common marketing strategy for supercar brands — and it works perfectly well for the psychology of Korea’s rich consumers.

The polarization of wealth is now reflected in the auto scene, with automotive maniacs flocking to cars that either have a very hefty price tags or are completely cheap.

“I bought a Ferrari 612 for its scarcity, so it has value in ownership,” said Kim Yoon-koo, a 31-year-old who works for a consulting company in Seoul who also owns a Porsche 911 and a BMW M5.

“Luxury cars definitely offer the enjoyment of driving and better performance and technology than cheaper cars.”

While luxury cars are selling like hotcakes, automakers refrain from swelling production dramatically, controlling the supply to maintain their products’ scarcity and value.

Consumers, therefore, have to wait for up to three years for delivery. Though a nonrefundable deposit of 10 percent of the car price is required, orders rack up.

Lamborghini introduced the Revuelto, its first plug-in hybrid EV, in Korea in June but the preorders filled until 2025 on the release date.

Similarly, Rolls-Royce launched the Spectre, its first-ever pure EV, last year, but orders are closed through mid-2025.

“Supercars that cost multiple millions of won sell even better amid the economic slowdown,” said Kim Pil-soo, an automotive engineering professor at Daelim University College. “Koreans have the tendency to consider cars an expression of their wealth and social status.”

People take a photo of the Lamborghini Huracán Tecnica at the release event held in July, 2022. [AUTOMOBILI LAMBORGHINI]
People take a photo of the Lamborghini Huracán Tecnica at the release event held in July, 2022. [AUTOMOBILI LAMBORGHINI]

 

Conspicuous consumption leads to ‘car poor’

Korea’s high-end auto market is predominantly led by the younger generation, who are influenced by conspicuous display culture, which eventually transforms some into “car poor.”

People strongly consider luxury car ownership a manifestation of their worth, leading to an emphasis on the significance of visible economic status.

“I do think I, myself, am car poor,” said a 29-year-old surnamed Choi, who bought a secondhand Porsche Cayenne Turbo S under a 60-month installment plan. “I use 70 percent of my monthly salary for maintenance costs.”

“Car poor” is a term Koreans use to refer to people who splurged on considerably high-end cars compared to their income. It differs from being “house poor” because a car’s value only depreciates.

“But honestly, I enjoy seeing people often left in awe when hearing the aggressive purr of my car’s engine,” Kim added. “My girlfriend really likes it too.”

The culture is even represented in parallel pyramid for automobiles that went viral, encapsulating the hierarchy of luxury car brands that people can afford based on their salary.

The pyramid suggests people with the very bottom line, who earn less than 20 million won per year, take “BMW” — “Bus,” “Metro” and “Walking,” meaning they can’t own a car.

It classifies brands like Kia, Renault and Chevrolet as cars for “ordinary people,” while Toyota and Ford are for the “middle-class.” Genesis, Tesla and Volvo are for those who “want to be luxury,” while BMW, Mercedes and Lexus are on the level of “luxury.” Rolls-Royce, Bentley and Maybach are the “Top 3” while Bugatti and Pagani are on “another level.”

“In rapid economic growth, Koreans are highly dependent on conspicuous consumption to show off their rise in social status,” said Hong Eun-sil, a family environment and welfare professor at Cheonnam National University.

“The desire for extravagant indulgence comes from the intention of Koreans who have long felt inferior to people in the upper class to imitate their consumption patterns,” Hong added.

Porsche cars are displayed at the Seoul Mobility Show 2023 at Kintex, Gyeonggi. [YONHAP]
Porsche cars are displayed at the Seoul Mobility Show 2023 at Kintex, Gyeonggi. [YONHAP]

Price hike of local brands drives the popularity
Climbing prices of local brands like Hyundai Motor and Kia drive up purchases of high-end cars, actual consumers complain.

“The biggest advantage of buying a Hyundai or Kia was their affordable price, but not anymore,” said Ferrari owner Kim. “Neither has as much variety in discount options as imported brands.”

“German brands like BMW and Mercedes offer discount options, and of course, they have higher brand awareness and driving performance,” Kim added. “So who would buy local brands?”

The prices of Korean-made vehicles jumped 20.6 percent in 2022 compared to two years ago, while prices of imported brands rose 12.6 percent during the same period, according to the latest data from market tracker ConsumerInsight. Comparing the figures from eight years ago, the prices of local brands surged 51 percent while imported brands climbed 36 percent.

Plus, imported brands offered three times more discounts and promotions worth a total of 2.5 million won in 2022 while those who purchased local brands only received 810,000 won in incentives.

The price of the Genesis G80 sedan, for example, rose 11 percent between 2020 and 2024, while BMW 5 Series, the G80’s rival, increased only 7 percent.

“The price hike of Hyundai and Kia cars is steeper than other brands, even in consideration of their improvement in quality and brand awareness,” said an industry expert who wished to remain anonymous.

Visitors take a look at supercars at the Mens Festa exhibition at Coex in southern Seoul. [YONHAP]
Visitors take a look at supercars at the Mens Festa exhibition at Coex in southern Seoul. [YONHAP]

Will the craze hold up?
The craze appears to face speed bumps — at least, according to statistics — due to the Korean government’s recent easily noticeable light-green license plate policy.

While most luxury cars like Lamborghinis and Rolls-Royces are officially company cars, it turns out that many business owners use them for personal activities.The policy requires corporate cars with a price tag of over 80 million won to affix the conspicuous plates instead of the standard white plates in an attempt to curb the misappropriation of company vehicles for personal use unrelated to business activities.

Only 20 Rolls-Royces were newly registered in January and February, down 36 percent during the same period a year earlier. Only 24 Bentleys were sold during the same period, down 82 percent, while Lamborghini sales plunged 76 percent.

But experts warn that the figures are no more than an illusion, with luxury car purchasers who want to avoid green plates tricking the authorities by falsely reporting acquisition prices.

A total of 5,762 imported vehicles were affixed with the plates for high-end imported vehicles between January and February, according to data from the Ministry of Land, Infrastructure and Transport acquired by Democratic Party Rep. Kim Ju-young’s office.

The total constitutes a drop of 18 percent compared to the same period last year.

The number of company-owned imports purchased for 70 million to 80 million won, and thus exempt from the special plate rule, rose to 1,110 from 1,075 during the same period last year.

Of the 1,110, however, the actual market value of 912 exceeded 80 million won.

Among the underreported acquisitions, 628 were worth between 80 million won and 90 million won at the time of sale, 271 between 90 million won and 100 million won, 11 over 100 million won but cheaper than 110 million won and two with a value in excess of 120 million won.

The companies behind the purchases declared acquisition values lower than the actual amount paid — which surpassed 80 million won — to the Ministry of Land, Infrastructure and Transport, allowing them to attach white license plates.

BY SARAH CHEA [chea.sarah@joongang.co.kr]

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