|Korean cars gobble 55% of market|
Guardian Business Editor
Published: Jun 28, 2012
At least one major car dealer has increased its Korean brands - Hyundai and Kia - by 100 percent over the last year to meet a surge of demand for hot models.
Owner and President of Executive Motors Fred Albury said the Korean brands’ rising market share in the country is causing the industry to react dramatically. He called the Korean-made vehicles his "bread and butter".
In fact, the Bahamas Motor Dealers Association (BMDA) is reporting a total market share for Hyundai and Kia of 55 percent, which strongly accounted for an overall sales increase of 5 percent for the month of May.
"The Korean brands are where the growth is," Albury explained. “The other brands, such as Toyota, are trying to find their niche in the
Overall sales from January to May rose 13 percent, according to the latest statistics from the BMDA, totaling 1,115 units compared to 988 units in 2011.
These numbers, however, remain a long way off pre-recession levels.
Albury said the focus on Korean models is so high that dealers often find it difficult to acquire enough stock to meet the demand. Vehicles are acquired on an "allocation basis", whereby if 500 are on order, dealers are granted around 200 units at a time. Nevertheless, he estimated that Executive Motors currently has around $5 million in stock, when it comes to Korean-made cars.
"We could sell more of certain models, but we're only able to get certain amounts," he said.
The auto executive attributed a solid formula of quality and price as the primary reason for the success of Korean-made vehicles.
Rick Lowe, a director and operations manager at Nassau Motor Company, said the market overall has bottomed out since the election. He hoped sales will improve for June and July, spurred by a number of car shows on the itinerary.
Adding to the dominance of Korean-made cars, he noted that the remaining 45 percent of the market is spread out among seven other brands.
"It has really been increasing lately, in terms of the Koreans," he said. "Rather dramatically, I would say, over the last year."
So while sales might be up for some dealers out there, those without a focus on Korean-made cars have seen limited growth.
Japanese brands have been impacted due to the high value of the yen, the BMDA noted in a release.
That translates into high costs for local distributors, although automobile manufacturers in Japan, including Toyota and Nissan, are reportedly shifting production to other countries in an effort to keep production costs down.
Albury told Guardian Business that a common grievance among stakeholders in the industry is the continued importation of old cars. While it might be cheaper for some consumers, the move impacts the new car market, and also limits the money to be made through taxation.
New cars also use less fuel, which would ultimately help the economy’s costly dependence of foreign fossil fuels, Albury explained.
At the moment, he said, there is no limit on the age of imported cars. Limiting the age to four years would go a long way to improving the situation and cleaning up what's on the roads.
"The new vehicles today will become the old cars of tomorrow," he said.