In an unprecedented move, leading imported car brands—Mercedes-Benz, BMW, Audi, and Volkswagen—are offering substantial discounts on their models in South Korea. These discounts, exceeding 20%, come at a time when the market faces challenges due to sluggish sales and consumer apprehension about electric vehicles (EVs).

 Market Context and Challenges

- Traditionally, imported car manufacturers reduce prices significantly at year-end to clear inventory. However, this year's situation is unique.

- High loan rates and inflation have dampened consumer sentiment, resulting in a 7.8% decline in imported passenger car sales from January to April compared to the previous year.

- The "Chasm" effect—a temporary stall in demand for EVs—has particularly impacted high-end imported cars.

- Legislation mandating green license plates for corporate cars valued over 80 million won has further decreased sales.

 Extraordinary Discounts

- BMW and Mercedes-Benz, usually fierce competitors, are leading the discount campaign. Even in May, they are offering more than 20% off on select models.

- Other foreign automakers are also joining the price-cut trend, especially on EVs.

- Notable discounts include:

    - Mercedes-Maybach S-Class (680 4MATIC): Starting at 375 million won, it's now available at a whopping 25% discount—the highest reduction.

    - Mercedes-Benz S-Class (580e 4MATIC): Also reduced by 16.9%.

    - BMW X3M (Competition model): On sale for a 22.7% discount.

 Implications and Outlook

- While the arrival of the 2024 model year plays a role, the high discount rates persist.

- Consumers can take advantage of these unprecedented deals, especially if they're considering luxury imported cars or EVs.

- The industry hopes that these discounts will stimulate demand and alleviate the EV phobia prevalent in the Korean market.