Can Tata break into the South Korean car market?

How do you say non-tariff barriers in Korean?

At this year’s Seoul Motor Show, Tata Motors expressed a desire to introduce its popular passenger cars in the South Korean market. Bully for the Tatas then? Not quite.

While South Korea does not impose very high import tariffs, its market has been largely closed to foreign manufacturers. An automotive writer for a Korean daily cited patriotism as the cause for the preference for local brands. Patriotism, that is, helped by a wink and a nod from the government, for example, by auditing buyers of foreign cars. Foreign manufacturers have less than one percent share of the South Korean market.

Seoul Motor Show 2005 is supposed to mark the opening up of South Korea’s protected car market. Patriotic Indians are perfectly at home in their Hyundais, it remains to be seen if Koreans will let their sense of patriotism get in the way of a good drive.

Tailpiece: It is not known whether Tata Motors brought along the right ‘models‘ to appeal to the exhibition visitors.

9 thoughts on “Can Tata break into the South Korean car market?”

  1. Pingback: Simon World
  2. Nitin, I was there in last year’s Geneva Auto Show. Tata had their stall with some European models in salwar-kameez (not posing in front but just behind the desk). They were not making a daring entry into the EU market, but just showcasing their products (perhaps for EU investors), so it does’nt have to appeal to the public at large. In general, I would say that Tata products are under-powered. They seriously need to beef-up their horse-power if they want to make a dent.

    Talking about ‘patriotic’ Koreans, I read that the majority stakeholders in large Koren corporations are actually big western investment banks. Atleast, buying Korean will feed the manufacturing base there.

  3. Is Tata mulling over the idea of entering the U.S. market? It’s a big market, but extremely competitive. Nevertheless, it would be interesting to see how they would fare against the likes of Toyota and GM.

  4. This year’s Korean National Day, the Korean papers had adverts from iRiver – one of the Korean MP3 player makers asking people to be Korean and buy Korean to ward of the iPod popularity. I also find that most of my Korean friends outside Korea tend to buy Korean brands.

  5. Preetam:

    My buying is dictated not by nationalism, but quality. Fortunately, for Korea, it makes quality products.

  6. This is reminiscent of the US concerns over Japanese auto companies back in the 80s- the latter were protected from foreign competitors back home, while exploiting a fair playing field in the US.
    From Preetam’s comment, it doesnt come as a surprise that the Korean MP3 manufacturers should choose the word iRiver for their iPod substitutes. Apparently the Korean Hyundai started off by cloning the Japanese Mitsubishi car models, though now they have carved a niche for themselves.

  7. Niranjan,

    I may be mistaken here, but I remember seeing the iRivers before the iPods came into the market.

  8. You’re forgetting Tata Motors has a plant in Gunsan, Korea the one they inherited when they bought Daewoo’s Trucks Division. Also I believe tata’s strong point is not cars at all its trucks and busses.
    Probably some rebranding could also help tata motors

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