Changing Preferences of Customers Change Dynamics in the Passenger Vehicles Market.

PALO ALTO, Calif. -- Minicars and subcompact car models are losing their tag of 'favorites' in the South Korean passenger vehicle market. The increasing wealth of Koreans has shifted the tastes of consumers towards larger and multi purpose vehicles.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), Competitive Benchmarking of the Korean Passenger Vehicles Market, reveals that The entry of foreign cars and a liberalized market have seen a remarkable rise in demand for the more expensive sedans and sports utility vehicles changing the market dynamics.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants an overview of the latest analysis of the Competitive Benchmarking of the Korean Passenger Vehicles Market, then send an e-mail to Melina Gonzalez - Corporate Communications at [e-mail] with the following information: your full name, company name, title, telephone number, fax number and e-mail. Upon receipt of the above information, an overview will be sent to you via e-mail.

"Domestic carmakers may still have a stranglehold over the passenger car segment but the lowering of ban on Japanese vehicles and rise in disposable income have made foreign vehicles more accessible," says Frost & Sullivan Research Analyst Steven Chon.

The bankruptcy of Daewoo Motors and Renault Samsung Motors helped global automotive majors, such as Renault Group and General Motors Corporation, enter the market and revive the domestic companies. This technological transfer and capital injection influenced development of newer domestic models and increased the speed at which they roll out.

Existing foreign carmakers expect to continue investing in the domestic market and their position could consolidate further with the entry of Peugeot, Honda and Nissan.

"The popularity of multi-purpose vehicles is compelling carmakers to rethink their product development investments and promotional strategies to suit the shifting target audience," notes Chon.

The brand promotion strategies of domestic and foreign carmakers in the South Korean passenger vehicle market are different. While South Korean carmakers aim to attract a wider audience, foreign carmakers compete in niche markets.

If domestic carmakers do not close the brand image gap with foreign carmakers, they could lose market share when the cost of foreign vehicles decreases in future.

Domestic production promotions are diverse, model-specific and numerous, whereas foreign car advertisements are confined to a specific end-user segment. Global companies' promotions focus on rebates, low interest payments and tax incentives.

Since foreign companies target the upwardly mobile, their promotional materials tend to be innovative. With foreign carmakers' share in the high-end segment, domestic competitors have to select appropriate marketing strategies to improve their shares in the subcompact and compact segments.

Apart from promotion strategies, both domestic and foreign carmakers also compete on distribution and product portfolio to protect or boost their share. Domestic competitors have to meet or even raise the bar set by foreign carmakers by developing new models with diverse product lines or giving face-lifts to existing models.

"The expanding model range drives the need for accurate market positioning and differentiation to avoid product overlap," remarks Chon.

With the high costs of marketing promotions, regular face-lifts and development of new models expected to cut into profit margins, it is vital that domestic carmakers be more precise in their product positioning.

Competitive Benchmarking of the Korean Passenger Vehicles Market, a part of the Automotive Asia Pacific Subscription, helps establish participants and entrants understand the competitive strategies in the rapidly changing market. This research provides data and incisive analysis on the status, plans and marketing strategies that competitors are implementing in the South Korean passenger vehicle market. It offers product portfolios, brand promotion, distribution network, and business approaches of South Korean and foreign carmakers. Interviews and executive summaries are available to the press.

Frost & Sullivan, a global growth consulting company, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams, to deliver market insights, and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country.

Competitive Benchmarking of the Korean Passenger Vehicles Market

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The following is a key list of industry participants: BMW Korea; DaimlerChrysler Korea; Ford Sales & Service Korea; General Motors Korea; GM Daewoo Auto & Technology Co.; Gojin Motor Imports; Hanbul Motors; Hansung Motor; Honda Korea; Hyundai Motor Co.; Kia Motors Corp.; Korea Auto Industries Cooperative Association; Korea Automobile Importers and Distributors Association; Korean Auto Manufacturers Association (KAMA); KUZ Corp.; Mercedes-Benz Korea; PAG Korea; Renault Samsung Motors; Ssangyong Motor Co.; Toyota Motor Korea

Keywords in this release: Passenger car, South Korean, Kia Motors Corp., Daewoo Motors, Renault Samsung Motors, Renault Group, General Motors Corporation, Hyundai Motor Company, minicars, subcompact vehicles, multipurpose cars, Peugeot, Honda, brand image gap, product overlap, research, information, market, trends, technology, service, forecast