International Law

Save 20% on Hyundai Genesis: Ship It Back From America

On Wednesday I had a long-standing client and friend come into town for a meeting, and we met up at the Hyatt Hotel for sodas in the lobby before he had to shuffle off to the airport. Before meeting my friend, I noticed that Hyundai Motor was holding a US dealership conference in the bowels of the hotel.

Perhaps you’ve heard of this new Hyundai “luxury” car they’re calling Genesis—the one that’s just as smashed-up in a head-on collision as an Audi A8. I’ve had occasion to crawl around one at my local Hyundai dealership, and it seems to be a very “Korean” sedan aimed at the kind of guy who always rides in the back seat, or at least prefers to think of himself that way. And I say “he” because this car has almost zero chick appeal: Genesis is definitely a car aimed squarely at members of the Lucky Penis Club.

Personally, I think Hyundai Motor America is going to have a hard time moving the Genesis, especially while gas is five bucks a gallon because while its styling has a high ajeosshi quotient, the car is not all that fuel-efficient either.

But there’s good news: The unsold inventory of Genesis won’t pile up in America, because these cars will be reimported to Korea. It seems that the Genesis 3.8L V6 model which sells for the knock-down price of W52,800,000 here in Korea (US$54,090) will be sold for only US$32,000 (plus tax and registration) to American consumers. A parallel importer has done the math and found that even with Korea’s punitive car-import duties and engine-displacement taxes, he can roll them back onto the car-carrier and sell Genesis here for W10,000,000 less than Hyundai has set the Korean price.

Together with its Kia subsidiary, Hyundai has a 70% share of the local market and a habit of pricing its cars much higher in Korea than in the United States. It sure is great to be a Korean consumer.

With those kind of fat margins to extort from Hyundai, it’s no wonder the Hyundai Motor labor union desperately opposes open markets and the Korea-US Free Trade Agreement.

Full post as published by Korea Law Blog on April 04, 2008 (boomark / email).